Political Posts

[gfp]

If the fiscal deficit is too large relative to GDP, raise revenue and cut spending the best you can pull off without putting the economy into a depression.  If the economy falls apart, revenue will plummet and the deficit will be larger.  I disagree that the trade deficit (the other issue) is a problem at all and I certainly disagree that individual bilateral balance of trade between any two countries needs to be even. 

 

If you are the president and you think we need to run balanced trade with Vietnam, you are an idiot.  I expect that stuff from bums at the local pub - not the oval office.

[LC]

11 minutes ago, cubsfan said:

Of course the deficit is out of control.. But you, like everyone else here does nothing bitch, moan, and criticize with never a solution.  

 

That will never change. 

 

I mean that's a fair point. Trump should spend time communicating that to the country vs. playing another 9 rounds.

 

Just brainstorming some ideas:

 

Raise corporate tax rates?

Raise 1% taxes/cut out BS loopholes?

(I imagine he could bully his buddies in congress to pass whatever tax law he wants)

 

Use tariffs more judiciously i.e. against trade offenders and large importers (China)

Actually negotiate with Europe re: military spending

Do a better job reducing government spend (headcount)

Work with Powell/FRB and not against them? Send the guy a gift basket for a 2% rate cut.

[Blake Hampton]

The text had tariffs mentioned in it. I’m covered.

[Blake Hampton]

1 hour ago, Intelligent_Investor said:

The problem with this statement and all statements like this from Dimon and the rest of Wall Street/economists is that they always say "deficit is a problem and unsustainable in the long run" but also don't want to feel the pain of the tariffs in the short run. They also crucially don't give any alternatives to trade barriers in terms of solving the deficit issue. Seems like everyone feels they can continue on at the party and successfully leave one stroke before midnight without being left holding the bag. 

 

I would say the problem is that many of these same people have been sounding alarms for decades, yet Congress has never made any real effort to address them. Now we're at the point where the problems are so large they feel nearly impossible to fix.

 

We're about to be forced to clean a house we've put off cleaning for 30 years — and this house is fucking nasty.

 

Edited April 7, 2025 by Blake Hampton

[John Hjorth]

11 minutes ago, Blake Hampton said:

The text had tariffs mentioned in it. I’m covered.

 

Sure, but just be sure, I already did the move, so a valuable discussion of the letter doesn't get drowned and burried here. 

Edited April 7, 2025 by John Hjorth

[cubsfan]

3 minutes ago, LC said:

 

I mean that's a fair point. Trump should spend time communicating that to the country vs. playing another 9 rounds.

 

Just brainstorming some ideas:

 

Raise corporate tax rates?

Raise 1% taxes/cut out BS loopholes?

(I imagine he could bully his buddies in congress to pass whatever tax law he wants)

 

Use tariffs more judiciously i.e. against trade offenders and large importers (China)

Actually negotiate with Europe re: military spending

Do a better job reducing government spend (headcount)

Work with Powell/FRB and not against them? Send the guy a gift basket for a 2% rate cut.

 

Good for you @LC

 

That's better than the majority here:

 

No admission of the waste, fraud and abuse in the federal budget.

No admission of the debt problem.

Do we keep borrowing money, since it's no big deal 

Things are so wonderful, we should keep running massive trade deficits for another 50 years

 

Do blowhards in the media or democrat leaders like AOC or Cory Booker ever offer a solution to reducing our 125% debt to annual GDP?......of course not, they have NO plan to get to a balanced budget. Because any solution will be ugly and painful.

 

And yes, Trump probably needs to do a better job communicating to the country.

 

Somebody has to take this shit seriously - which politicians never do. They will just leave a big pile of shit for the next administration.

 

Or hey, like old Dealraker says - maybe I'm just out of my mind and I shouldn't even worry about

reducing the national debt and run trade deficits forever

[gfp]

Cubs, you know a balanced budget would cause a depression.  The US government isn't a household and you can't think of it like your household finances.

 

What's wrong with a trade deficit?  Why does it need to be zero?  I don't want my Nikes made in America and nobody in America wants to sew my Nikes.

 

Even if China buys the family farm with some dollars I force-fed them - they can't pick it up and take it with them back to China

[Blake Hampton]

I'm 23 and I live in Oklahoma. I'm definitely going to be the person sewing those Nikes. 

[LC]

The national debt is a weird one too because, yes we owe a lot of people a lot of money. But a lot of people also depend on us. And as @gfp mentions above it's not 100% cut-and-dry and I don't pretend I understand all the nuances.

 

Japan for example is the biggest single foreign owner of US debt. They also run a MASSIVE deficit - twice ours. Again I won't pretend to understand half the nuances - but I imagine it is not a simple debtor/creditor relationship. So I'll leave that alone.

 

Lux/Caymans...no idea who is really behind that. Russian shell cos? Screw em.

 

The Chinese? I could at least agree something needs to be done - so OK, pull the pin and lob tariffs at them.

UK & other European countries that depend on US security? Cut a deal. Restructured debt in exchange for military support.

 

Let's just say it's obviously not as simple of a solution as 10% tariffs across the board. But that's how Trump negotiates - start with a sledgehammer and maybe it whittles down to a chisel.

 

[gfp]

11 minutes ago, Blake Hampton said:

I'm 23 and I live in Oklahoma. I'm definitely going to be the person sewing those Nikes. 

 

Blake, it's either you and your friends get to sewing or that tiny little lady in Vietnam needs to take out a loan for a GMC Sierra.  I don't see any other solution bro

[cubsfan]

5 minutes ago, gfp said:

Cubs, you know a balanced budget would cause a depression.  The US government isn't a household and you can't think of it like your household finances.

 

What's wrong with a trade deficit?  Why does it need to be zero?  I don't want my Nikes made in America and nobody in America wants to sew my Nikes.

 

Even if China buys the family farm with some dollars I force-fed them - they can't pick it up and take it with them back to China

Working toward a balanced budget is bad?

How large does the debt get before it threatens the country.

Do you continue to run deficits forever and let them grow?

 

Fine, so don't make it zero. If you shift good manufacturing jobs back to the USA - you pay people better, you increase your tax base, you very likely take people off entitlement programs.

Do you agree these are very positive moves for the country?

Fine, let someone else make the sneakers & textiles.

 

Like @Dalal.Holdings mentioned - shipbuilding? you want S Korea and China controlling that?

 

There have to be plenty of strategic manufacturing that will be great for this country.

Drug, equipment, etc.

 

The US used to be a manufacturing powerhouse obviously.  IF you are a country that makes nothing, what do you really have?   Is every American going to be a google or facebook programmer?   The country needs good jobs for it's health and national security.

 

There are few countries we should trust less that Mexico and China. 

[cubsfan]

13 minutes ago, LC said:

The national debt is a weird one too because, yes we owe a lot of people a lot of money. But a lot of people also depend on us. And as @gfp mentions above it's not 100% cut-and-dry and I don't pretend I understand all the nuances.

 

Japan for example is the biggest single foreign owner of US debt. They also run a MASSIVE deficit - twice ours. Again I won't pretend to understand half the nuances - but I imagine it is not a simple debtor/creditor relationship. So I'll leave that alone.

 

Lux/Caymans...no idea who is really behind that. Russian shell cos? Screw em.

 

The Chinese? I could at least agree something needs to be done - so OK, pull the pin and lob tariffs at them.

UK & other European countries that depend on US security? Cut a deal. Restructured debt in exchange for military support.

 

Let's just say it's obviously not as simple of a solution as 10% tariffs across the board. But that's how Trump negotiates - start with a sledgehammer and maybe it whittles down to a chisel.

 

 

Damn @LC I'm starting to like you again

[Spekulatius]

1 hour ago, no_free_lunch said:

Respectfully, I strongly disagree on the trade.  There were $5T of trade deals announced over the past 3 months.  If that comes to pass, there is going to be significant production in the US and while I dont know how it winds through the stock market and to profits it should benefit the US economy in some way.

A lot of the $5T in trade deals is vaporware. For example the Stargate announcement or the Apple deal of $500B which includes not just investments but all purchases  from US suppliers. Apples Capex has an only been around $16B/ year and that has been shrinking.

 

So there will be some jobs being created but not as much as you think given the headlines numbers. How many people does a $1B datacenter employ? Probably not more than a Walmart superstore.

Edited April 7, 2025 by Spekulatius

[gfp]

6 minutes ago, Spekulatius said:

A lot of the $5T in trade deals is vaporware. For example the Stargate announcement or the Apple deal of $500B which includes not just investments but all purchases  from US suppliers. Apples Capex has an only been around $16B/ year and that has been shrinking.

 

So there will be some jobs being created but not as much as you think given the headlines numbers. How many people does a $1B datacenter employ? Probably not more than a Walmart superstore.

 

Yeah - I can't believe Trump himself hasn't realized he's being played by the headline figures out of Apple.  It seems like he actually thinks they are going to start building factories in the United States to build the products we have heard of.  I figure he'll be sort of mad when he finds out the reality of the plan and he just never bothered to read it.

[cubsfan]

2 minutes ago, gfp said:

 

Yeah - I can't believe Trump himself hasn't realized he's being played by the headline figures out of Apple.  It seems like he actually thinks they are going to start building factories in the United States to build the products we have heard of.  I figure he'll be sort of mad when he finds out the reality of the plan and he just never bothered to read it.

 

Just keep sending it all to China. They'll eventually figure out how to steal the IP, like they have for years.  What's crazy is continuing to let them do it. And just like that - you'll never manufacture anything again.

 

At the same time, the US can continue to commit economic and social suicide.

 

At least we have someone that will try and reverse it.

[John Hjorth]

28 minutes ago, Spekulatius said:

... So there will be some jobs being created but not as much as you think given the headlines numbers. How many people does a $1B datacenter employ? Probably not more than a Walmart superstore.

 

And the localisation decisions for datacenters for those of the Mag7s who operates and uses such thingies, are based on other, different criterias, that really do not have anything with trade to do.

[Dalal.Holdings]

 

It sounds like Japan will be the likely first big deal

 

[Dalal.Holdings]

 

https://www.politico.com/news/2025/04/07/trump-bessent-trade-deals-tariff-endgame-messaging-00277395

 

Quote

 

Treasury Secretary Scott Bessent flew to Florida Sunday to encourage President Donald Trump to focus his message on negotiating favorable trade deals — or risk the stock market cratering further, according to two people familiar with the conversations, granted anonymity to share details of them.

 

Quote

Bessent, who landed with the president at the White House on Marine One Sunday night, told Trump that markets would remain in peril unless he started putting more emphasis on talking about his endgame with tariffs — winning deals with other countries.

 

Sounds like Bessent is the only grown up in the room with nutjobs Lutnick and Navarro vying for chaos

[LC]

1 hour ago, cubsfan said:

Damn @LC I'm starting to like you again

 

It's martini Mondays so let's not get too ahead of ourselves

 

I don't know if manufacturing can ever really come back to the US, not until there is some purchasing power parity between US and large "3rd world" manufacturers. Mexico/China, then SE Asia...soon more and more of India...poverty labor is cheap and work will go to wherever costs are cheapest.

 

Protecting something intangible and easily copied, like IP, is very hard. Especially in a globalized world where everyone has nukes.

 

But I think there is some middle ground - the US can at least focus on taking back share of highly-skilled manufacturing. And it can push harder to enforce IP laws, and try to punish China when it breaks those laws.

 

 

[Spooky]

2 hours ago, gfp said:

If the fiscal deficit is too large relative to GDP, raise revenue and cut spending the best you can pull off without putting the economy into a depression.  If the economy falls apart, revenue will plummet and the deficit will be larger.  I disagree that the trade deficit (the other issue) is a problem at all and I certainly disagree that individual bilateral balance of trade between any two countries needs to be even. 

 

If you are the president and you think we need to run balanced trade with Vietnam, you are an idiot.  I expect that stuff from bums at the local pub - not the oval office.

 

1000% this. Meanwhile the Republicans in the Senate are trying to pass a framework bill with $5 trillion in tax cuts with the spending cuts to be filled in later (never).

[hasilp89]

I’m trying to make sense of both sides of the argument and see merits in both viewpoints @gfp (why would we take a step back giving American workers menial jobs) and @cubsfan (we shouldn’t trade away the farm, we need to produce something of value).

 

I’m sure many here have read Buffett’s article in fortune on the trade deficit - I hadn’t in a long while and just re-read it. It’s worth a read and I’m curious as to what he thinks of the topic today.
 

While I’m sure he doesn’t believe in the current tactics to reduce the trade deficit, his views in the article make it pretty clear that running a large trade deficit will be a negative over time - he even has a family budget analogy where describes the problem as one generation passing down IOUs to the next. (@gfp I guess he misses the fact that the family can not great money by spending and issuing new debt on demand which the US gvt can do? - to which I would counter that when the budget deficit and stock of debt to GDP becomes to large doesn’t this become harder for the US gvt to do?)

 

Anyway I’m curious what folks think of the article and how it relates to today. Of course his worst fears did not come true (America became more productive with its extra time not working in the textile mill? Reserve currency status and our willingness to protect allies gave us a free ride? Our gdp grew at a fast enough rate that the amount of our wealth being exported never became a serious issue?)

 

I’ll be the first to say I’m not sure. But I sure would like to know.

Will throw out the bat signal to @wabuffo as we may benefit from his wisdom.

 

https://faculty.washington.edu/ss1110/IF/Buffett Fortune 2003 (6).pdf

 

 

[nwoodman]

16 minutes ago, Dalal.Holdings said:

Sounds like Bessent is the only grown up in the room with nutjobs Lutnick and Navarro vying for chaos

+1, the policy is ham fisted but those delivering the messaging have been disastrous.  It is incompetence beyond belief.  To go one step further it is also the bond market that is the adult in the room (it was always thus).

[Gregmal]

Nah Bessent is just another mindless knee bender in the administration and oh by the way, did you hear! His AUM declined!

[Jaygo]

28 minutes ago, cubsfan said:

At the same time, the US can continue to commit economic and social suicide.

 

Cubs that an interesting point. From an outsiders perspective the USA seem to have it made. The economy is doing well, your companies are the most profitable in the world, your GDP is way higher than everyone else but yall are bitching and moaning about jobs. I get it, a man needs to work but you guys have an amazing opportunity to take the reserve currency status and fix your home grown problems.

 

Why dont you guys fix your social problems and your schools and have a small business renaissance. Where are all the engineers? Ground up kind of manufacturing similar to the way it was long before globalization. I'm not talking Etsy crap i'm talking guys tinkering in their garages and building rockets and flying cars, and then building 30-100 person companies. Make being awesome cool again.

 

I used to go to NHRA drag races as kid. My uncle and I would road trip to middle America. I loved the Midwest. The nicest people, the best food and the biggest trucks.

The farmers, mechanics and the engineers would be in the pits building crazy shit and I remember thinking how incredible America was. Last time I went to a race the pits were closed to the public (safety bullshit )and 1/3 of the people were dead drunk ( social degradation ) or too fat to lean over the damn cars. 

 

I just want that America back, the America that kicks ass, the strong America that doesn't whine about poor people ripping you off. 

 

Let the SE Asians assemble your barbies and sew your socks. Hell, let the Chinese build you merchant ships if their willing to take a loss on it. Focus on the real shit that improves everyone's standard of living while the world is willing to take your phony money. 

[Jaygo]

18 minutes ago, LC said:

It's martini Mondays so let's not get too ahead of ourselves

 

That's something we can all agree with. Cheers Gentleman!!