The American people have given Republicans control of the federal government. The Grand Old Party now controls the White House and Congress. What will the party of Lincoln & Reagan do with this opportunity as it pursues the Trump Agenda?
From a financial perspective, Congressional Republicans have taken after Aaron Judge and, much like striking out at the World Series, whiffed on their opportunities to engage in serious reforms. During the George W. Bush era and Trump’s first term, fiscal stewardship was an afterthought. Overspending continued, and the country’s debt mounted.
Republican leaders must get it right this time and make sure they hit some financial home runs, or the ticking time bomb of national debt will eventually detonate. With $36 trillion in debt and $2 trillion more borrowed this year, America is racing toward an unpleasant day of reckoning. Just look at the stifled growth in Japan after their debt load began to strangle their economy.
In 2000, after battling and winning the Cold War, the percentage of debt compared to the total output of the US economy was 55%. Today, in peacetime, the debt is 123% of our economy. Sirens should be going off in everyone’s heads.
As we have often mentioned in these posts, the future of our kids and grandkids depends on today's decisions and getting our financial house in order. I am excited about the short-term growth potential of the U.S. economy as the Trump agenda provides for lower taxes, less regulation, and reduced energy costs. However, unless critical steps are taken to reign in spending and reduce the national debt, all efforts are made in vain.
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