On Inauguration Day, the Washington Post mocked the 76 promises that Donald Trump had made during his campaign. (1) Among them, I focused earlier on (2) on his promise ranked 51: Reduce the $19 trillion dollars national debt by vigorously eliminating waste, fraud, and abuse in the federal government, ending redundant government programs and growing the economy to increase tax revenues.
Five months later, it is time to make an inventory of his vow.
When Donald Trump took office on January 20, 2017, he inherited – thanks to dear President Obama- a national debt of $19,947 billion. Today on June 26 2017, the national debt stays at $19,858 billion. (3) Trump has reduced the national debt by $89 billion in five months in office. It is not a big slash but he has turned the debt clock backwards, which is a prowess considering that the budget was voted by the former 113th Congress. Contrary to France, the annual budget does not start with the new year but in October.
In his final budget address, President Obama made that egregious comment. (4)
“Over the past seven years, I have seen the strength, resilience, and commitment of the American people. I know that when we are united in the face of challenges, our nation emerges stronger and better than before…The budget is a road-map to a future that embodies America’s values and aspirations: a future of opportunity and security for all of our families; a rising standard of living; and a sustainable, peaceful planet for our kids. This future is within our reach.”
As an intense socialist, Obama distorted the meaning of words. What kind of future of opportunity and security for families represents the doubling of the debt during his tenure? Obama overindulged in the newspeak invented by George Orwell in his Nineteen-Eighty-Four novel.
Mainstream media pretends that the reduction of national debt is a carry-over from Obama’s presidency. It is too early for Trump to claim any credit for the turnaround!
Is that so? Obama increased the national debt every single day he was in office. However, Trump has already stopped the spiraling debt before the 114th Congress is convened to vote the federal budget. Understand if you will mainstream media.
President Obama and former Federal Reserve Bank governor Bernanke ran amok the country
Former Vice-President Joe Biden, who was campaigning for his former boss Obama in the 2012 presidential campaign, lashed out against Republican candidate Mitt Romney in Martins Ferry, Ohio, that sentence, which pleased enormously his base: Running a company is not the same as leading a country. (5)
Of course, it is not the same thing but not for the reason invoked by Joe Biden. A company, which is badly managed, goes inevitably bankrupt. A country badly managed can borrow money on the bond market for a while, but in the case of USA -noblesse oblige- the Federal Bank issues unlimited currency notes for the US government.
The most secret and oldest American company
On October 10, 2012 as I was hiking SOBO (southbound) on the Appalachian Trail, I stopped in Dalton, Massachusetts, for a special purpose. That quaint little town hosts the Crane Museum, which is adjacent to the company of the same name. We were merely a dozen of tourists in the lull of Indian summer, and our guide was an affable eighty-year old man who had worked all his life for the Crane Company. He introduced us to the history of his company.
There were many paper mills in the Berkshire Hills in the eighteen century, but Stephen Crane was the first in the family to become a paper-maker. He sold currency notes to an engraver, who printed the American Colonies’ first paper money in 1770.
The greenback, which is the paper currency printed in green on the back, was issued by the United States during the American Civil War. Before the Civil War, paper currency was issued by privately owned banks. The Crane Company had not a monopoly on making paper notes for those banks. But the counterfeit of other paper notes was so gross that Crane kept up the preference of private banks. Thanks to an unceasing quest for quality, the company remained above the fray.
The green ink is the color of spruce trees, which grow on Mount Greylock at 3848 ft (1063m), which is the highest mountain in Massachusetts. The Appalachian Trail climbs to the summit before diving to Dalton. Trail builders have no mercy for the joints of hikers.
In 1879, Crane Company won a contract to deliver U.S. currency paper to the Bureau of Engraving and Printing in Washington, DC. If the success of Crane is under the radar, it has remained the only purveyor of bank notes for the Federal Reserve Bank, which has the authority to issue Federal Reserve Notes (U.S. Dollar) and Federal Reserve Bank Notes as legal tender. The Federal Reserve Act was signed into law by Woodrow Wilson on December 23, 1913.
Briefly, Crane produces, nowadays, a secured paper with state of the art technology, whose design involves a micro-lens array interacting with graphics far smaller than any counterfeit money. Our guide was proud to show us the tiny secure details, which are embedded in the new $100 note with the American founding Benjamin Franklin featured on the obverse of the bill.
At the end of the visit, I asked a question to our guide regarding the business of his company. He divulged something, which bothered me. “When I was young, we worked like civil servants from 8 a.m. to 4 p.m. Now, it is a double shift schedule because we receive orders, on short notice, from the Bureau of Engraving and Printing in Washington.”
Thanks to dear President Obama, and Keynesian-style former Federal Bank president Ben Bernanke who was nicknamed helicopter drop for his unconventional tool of monetary policy, the Crane Company was overwhelmed by orders. Our guide said that sometimes trucks were queuing in order to load up pallets stacked with dollars. Once this had been done, the back door of the truck was sealed by F.B.I. agents, and the driver could leave hastily the company in the direction of Washington around midnight. Dalton, which is 400 miles northeast of Washington, is a seven hour journey on Taconic State Parkway, then on crowded Interstate 87 along the Atlantic coast.
The solvency of a nation lasts as long as the confidence and the appetite of the largest foreign holders of the debt do not wane.
Japan owns $1.1 trillion in U.S. debt, and China $1.1 trillion. Both countries want to keep the value of the dollar higher than the value of their currencies. That helps their exports for the United States.
It is a conundrum for Trump who has promised to his electors that he would revamp the trade in favor of American companies. (6) When I lived in New York, I learned an adage from Wall Street that candidate Trump had probably forgotten: Confidence is that cocky feeling before you know a little better.
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