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b'We\'re getting a tax cut!
\\nThere is one thing now that that has the potential to cause a short-term decline of more than 3% in the stock market, and that would be: no tax cut.\\xa0 If the Republicans announce that they\'re at a deadlock, and we\'re not going to have any tax reform or tax cuts, it seems to me the stock market will get hit.\\xa0 Washington and Wall Street both agree that if we don\'t get this tax cut, the market\'s going down.\\xa0 So what does that mean?\\xa0 We\'re getting a tax cut!
\\nMaking the Stock Market Great Again
\\nAfter all, the market is now the barometer of the success of the Trump Presidency, and by extension, the Republicans in the House and Senate.\\xa0 If House Republicans want to get elected in 2018, the Dow Jones had better be higher than when Trump was elected. This is not about making America Great Again, it\'s about Making the Stock Market Great Again. Not that it wasn\'t great before Trump was elected, but now the greatness of the stock market goes hand in hand with the greatness of America.
\\nAccelerating the Growth of the Budget Deficit
\\nSo we are going to get a tax cut, but that pretty much assures that we are going to get an increase in deficits and the National Debt.\\xa0 They\'ve already cleared the way now in the Senate and the House is about to rubber stamp it someway that the Republicans are allowed to reduce revenue to the Federal government by $1.5 trillion in the tax cut bill - over 10 years.\\xa0 So it\'s not $1.5 trillion a year, it\'s only $150 billion a year, over 10 years. Remember, government spending is going to rise substantially over those 10 years, so the government actually needs a lot more revenue in order to cover all its spending. So when you reduce the revenue you just further accelerate the growth of the budget deficit and the resulting National debt.
\\nRepublicans Don\'t Care About the Deficit
\\nWe\'ve got a number of Republicans who were very hawkish about the debt and when Obama was President, "We\'re going to shut down the government\\u2026" "We\'re not going to raise the debt ceiling\\u2026" They demanded fiscal discipline.\\xa0 In fact, there was some modicum of discipline imposed on the budget, but all that is now being unraveled under Trump.\\xa0 Now the Republicans can throw out whatever discipline that they forced into the system when Obama was President.\\xa0 I\'ve said this before, that when Republicans are in the minority, they can at least try to exert some pressure on government spending. The minute they have both houses of Congress and the White House, precedence shows that they don\'t care about the deficit.
\\nConsequences of Tax Cuts: Higher Inflation and Higher Interest Rates
\\nThe deficits are only a problem when the Republicans are in the minority. But when they have the power, they don\'t care about it because they want a tax cut, and deficits be damned. Especially when the market now depends on it.\\xa0 Nobody wants to stand in the way of the market. Even Rand Paul, who was the one Republican who voted against the Senate budget resolution, has already said that he will vote for the tax cuts.\\xa0 He just did not want to vote for the budget bill to enable the tax cuts.\\xa0 Somehow now that the budget bill has been enacted, he is going to vote for the tax cuts. He\'d rather people pay lower tax than deal with the consequences, which are: higher inflation, higher interest rates.\\xa0 There is not free lunch.\\xa0 That is the problem with these tax cuts.
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