Wednesday, March 15, 2017

Beware the Ides of March

Beware the Ides of March
By Jeff Thomas


Idus Martiae is the Latin term for 15th March from the traditional Roman calendar. Since 44 BC, the Ides of March has held a dark reputation, as that was coincidentally the date of the assassination of Julius Caesar.

In December of 2016, the chairman of the Federal Reserve announced that the Fed was likely to raise the interest rate several times in 2017. The next such rise is anticipated to take place on 15th March.

This is also an interesting date, as it’s the date upon which the US government reaches its debt ceiling. This was cast in stone by the previous administration, back in 2015. Although they put into place an automatic freeze on any increase in debt after that date, they did nothing to either cut back on expenditure or prepare for further funding. Therefore, the Ides of March once again has become ominous, as the US government is set to come to a grinding halt as soon as the money presently in the Treasury runs out.

On 15th March, the US Treasury will hold roughly $200 billion and will be unable to borrow more.

When that $200 billion runs out, that’s it. Although this amount may sound sizeable, the US government spends roughly $75 billion per month, which means that it is due to hit the wall around the 1st of June.

As the date of the freeze is passed in law, it will be difficult to alter.

Many American voters became concerned in recent years that their government was not behaving in a prudent manner with regard to spending and, when Donald Trump ran for president, he promised to “Make America Great Again” and to “drain the swamp.” This was encouragement enough for voters to elect him. However, he also promised to increase spending on infrastructure, border controls, law enforcement, veterans’ benefits, and the military. In addition, he assured America that he would not cut back on benefits such as Social Security.

He promised to make these spending expansions at the same time as he planned to make drastic cuts in revenue in the form of taxation.

Dramatic cuts in taxation added to dramatic increases in expenditure plus a mandatory freeze on the increase in debt amounts to an economic Bermuda Triangle. Looked at in this light, it’s difficult to see the Ides of March as anything but an economic disaster waiting to happen.

Mister Trump’s ascendancy was an odd one. As an outsider, he was opposed by many Republicans who hold office. It’s understandable that the more indebted any Republican office holder is to his party, the more Mister Trump would appear to be a threat.

Although his candidacy was at first treated as a joke by both parties and the media, he did the unthinkable, beating out the pre-anointed Hillary Clinton. Democrats were horrified and remain so.

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