We have crossed the fiscal Rubicon, and not merely because Congress passed a $400 billion budget-buster in the wee hours of the morning rather than abide a government shutdown beyond sunrise.
And also not merely because the deficit is now locked in at $1.2 trillion or 6% of GDP during what would be the tail-end 10th year of the business expansion (FY 2019); or that it is on a path to doubling the national debt to $40 trillion during what will be the 2020s decade of demographic no return (i.e. 30 million more retirees on Social Security/Medicare).
What really happened is that the politics of the budget have now become even worse than the numbers. In a word, the GOP congressional leadership surrendered control of the nation’s finances to Chuckles Schumer, Nancy Pelosi, Donald Trump, the military-industrial complex and the domestic spending lobbies of every shape and form. The conservative fiscal opposition—-what was left of it—–has been obliterated.
Indeed, if the budget is a battlefield, and we can testify that it’s exactly that, last night amounted to The Battle of the Little Bighorn for the Freedom Caucus. Eight years on from the Tea Party uprising of 2010, they, like General Custer and his 200 men, are gathering flies where they fell on the steps of the Capitol at 5AM.
In that context, the House vote split tells you everything you need to know. The faithless Speaker of the House rounded up every RINO (Republican in Name Only), careerist time-server, fiscal hypocrite, blood-thirsty defense hawk and double-talking pork barrel pol that he could muster from the GOP caucus until he had 167 “yes” votes on the board.
He then opened his hand to the Dems, who quickly delivered the 51 votes need to approve the bill and eventually threw in 22 more for good measure. Then and there, of course, the Swamp creatures took control of the US Treasury—even as Speaker Ryan sent the 67 Republican “no” votes out back of the Capitol to be shot.
Here’s the thing. Mitch McConnell is a 54-year swamp creature and Paul Ryan is a gutless wonder. So when Mitchels and Chuckles, as we labeled them yesterday, proffered their “bipartisan” deal in the Senate, Ryan had the choice of (1) saying hell no and standing firm for a plan based on some semblance of GOP fiscal principles and GOP votes; or (2) sentencing the Freedom Caucus to an ignominious end.NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas; or the free eLetter for an introduction to our work. You can also keep up to date with plenty of actionable public content at NFTRH.com. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.