Disturbing Patterns Emerging From The Trump White House
After just sixty-six days, there are some disturbing patterns emerging from the Trump Administration.
Although it seems like much longer, Donald Trump has been President only sixty-six days so far, but there are already several patterns developing that seem likely to continue to be true for the foreseeable future. The biggest one, of course, is that the Trump Administration has no idea how to sell its message or its agenda to the American public. After a General Election campaign in which Trump and his surrogates focused on pitching a message about immigration, trade, foreign policy and other ideas that, while vague and without any real detail, at least was in line with what the candidate was saying on the campaign trail. From the day that they entered office, the chief spokespeople for the President, principally Press Secretary Sean Spicer and top aide Kellyanne Conway, have instead spent the vast majority of their time defending the President’s latest bizarre tweets, responding to the allegations about alleged contact between Trump associates and Russian officials and oligarchs, and attacking the media for alleged negative reporting and “Fake News.” As a result, there’s been little if any concentration on pushing anything resembling a coherent message that could be said to define the Administration’s first 100 days in office, a period of time that has become somewhat iconic in defining the early success of a Presidency.
A second obvious pattern that has developed is the fact that the Administration has had very few if any weeks that can be characterized as “good” weeks in Washington. To be sure, there have been some successes here and there. The announcement of Judge Neil Gorsuch as President Trump’s first Supreme Court nominee went very well, and that nomination appears to be moving forward toward confirmation regardless of whether or not Democrats are successful in at least initially utilizing the filibuster to block his confirmation. The same can be said for Trump’s first nationally televised address before Congress in late February, notwithstanding the fact that the speech itself was still nothing but the same kind of Trumpian mess that we’ve become used to. In both of those cases and several others, though, the Administration has, seemingly without fail, stepped all over its own message to turn a good week into a bad week. Sometimes, it’s come from external sources such as the judicial reaction to the Administration’s Muslim Travel ban Executive Order. In other cases, though, the damage was self-inflicted either by Administration spokespeople making ridiculous claims or by Trump himself making similar claims, usually during one his stereotypical Twitter rampages that seem to come on a regular basis whenever things seem to be going well.
Finally, it is clear that the Administration really doesn’t know what it’s doing when it comes to advancing a policy agenda, to begin with. The best example of this, of course, came in the form of the push for the passage of the American Health Care Act which lasted a grand total of just seventeen legislative days from the time the bill was first introduced to the time it was pulled late in the day on Friday. Throughout the two weeks that the bill was before Congress, the Administration sent conflicting signals about what its strategy was and largely left it to Congressional leaders to get the bill passed. Instead, all we heard from the White House was how great the plan was and how it would fix all our problems if only it were passed into law. There was little indication that the President was doing anything himself to actually assist in getting the bill passed until the very last minute when it was quite honestly too late to make a difference. Additionally, the manner in which the various factions of the GOP were handled shows that neither the President nor his staff knows how to handle their own party on Capitol Hill, that he lacks the leadership skills necessary to do so, and the President’s absurd efforts to blame Democrats for the failure of the bill. The result was a history-making legislative debacle early in a Presidential term that is likely to taint the ability of this President to influence Congress going forward.
All of this, of course, is part of the reason why the President’s Job Approval numbers are at historic lows for an incoming President. What’s significant about these patterns, though, isn’t just what they mean for job approval of personal favorability numbers but what they tell us about the future. While it’s still very early in the Administration and it’s always possible that things could turn around, the likelihood of that happening become less the more engrained they become in the news cycle and the way the White House operates. Some have already suggested that Trump needs to clean house at the White House and bring in people who are better at their job than the current crop of White House advisers. While that might help a little bit, the reality is that there’s only so much that changing personnel can do to change how things operate in the White House. In the end, the staff is little more than a reflection of the boss, and these first sixty-six days are telling us that, notwithstanding his reputation, Donald Trump isn’t a very good boss at all and an even worse decision maker. This doesn’t bode well for the future of any of the Administration’s future endeavors, whether we’re talking about tax reform, immigration, the budget, the debt ceiling, or anything else. And, as I said Saturday, raises serious concerns about how well Trump can actually handle a seemingly inevitable international crisis whenever it may rear its head. Add into all of that an investigation into the connections between the Trump campaign and Russia, whatever they might have been, and it paints a recipe for failure unlike anything we’ve seen in recent memory.
Hold on folks, it’s only likely to get worse from here.
Something is going to happen soon and when it does we are all fwcked. If you cannot pass legislation that Republicans have been talking about for 7 years, then you are incompetent; this goes for the entire party, not just the Comb-over Donnie. Organizations like ISIS have to be looking at this clown and seeing a huge opportunity. And that puts a target on all of our backs.
So an idiot president who is the de facto leader of the nation’s idiot party struggles with his agenda even though his party controls the Congress.
How is that supposed to be a bad thing? The best thing for the country is for Trump to fail. The more that he fails, the better.
And we should welcome anything that brings the most pain to those who supported him. They have earned it.
The thing is, he’s in a position to do irreparable damage to everything and everyone. What causes pain to his fan club is very likely to cause pain to all of us.
Given his inability to get anything done, it’s more a case of it being only likely to get the same from here.
It could get considerably worse if he decides to engage in a Twitter fight with Kim Jong Un.
You know what’s worse than Trump failing? Trump succeeding.
It would have obviously been better if Trump lost the electoral vote. But it’s a bit late for that, so now you should want him to fail, since what he wants is bad for the country.
And we should be gunning for impeachment proceedings in 2020 that can drag down both Trump and Pence so that both of them are damaged goods and it is too late for the GOP to find their replacements. Attack, attack, attack.
Why wait till 2020?
@Pch101: Him failing at getting his preferred policies passed…good.
Him failing at handling a major international crisis…bad. Potentially VERY bad.
You should want it to be difficult for the GOP to find replacements for Trump and Pence. You should be gunning for the whole of the Republican party, not just Trump.
Pushing out Trump now would help Pence, which helps the Republican establishment. No one who is even slightly left-leaning should want that.
Can we last four years? Not that I don’t understand your point.
Practicing your British understatement, Doug? That’s a big like a headline of
Forgive me for being a buzzkill, but it’s just possible that we should consider what will be sucked into the power vacuum if the GOP is completely destroyed. I mean, I like the idea, but I’m relatively old, in mediocre health and can leave the country should I decide to. YMMV.
But it will likely cause more pain to the people that voted for him — sometimes, the small victories are all you can get, but sometimes they are enough.
Stop being so negative.
A black hole of collapsed ego with no capacity for empathy, no skills at rhetoric, no grasp of detail, and a sub-par intelligence can’t sell his policies? Gosh, that is a surprise.
Of course he needs to get rid of virtually all his employees and start over, but that’s flatly impossible because competent people – the people who could help – are to a man or woman people who never wanted this cretin in the White House to begin with. So the Donald would have to evict loyalists (idiots) and bring in smart, capable people (not idiots) and that runs directly counter to Trump’s Number One Belief which is of course in the transcendent brilliance of Donald Trump.
It’s not going to get better. We haven’t even had a crisis yet. He took office with a growing economy, rising stock market and falling unemployment, and used this lovely hiatus to completely destroy his own credibility and signal American confusion and weakness to the world. And coming up? Korea, Iran, a Putin move against NATO, Chinese expansion in the South China Sea, a likely recession at some point, a possible major terror attack, a disease outbreak. . .
. . . Not to mention various of his people being perp-walked off White House grounds by the FBI.
It’s fun to point and laugh at this boob and his boob cronies with their vulgar little scams and infighting and incessant lies, but Trump is a criminal, a corrupt man running a corrupt administration. He is a traitor who has sold out American democracy for sweet, sweet Russian money-laundered bank loans. He is incompetent, lazy and permanently ignorant. He is trusted by at most a third of Americans. And if/when sh-t and fan collide we will actually need a president, not an illiterate Fox n’ Friends fanboy.
Anything bad enough to cause pain to his cultists is going to be catastrophic, because that’s what it would take.
Trump’s idea of a successful foreign policy would be a disaster that combined Fox News’ truthiness with Breitbart’s bigoted hysteria.
There is no scenario in which Trump’s success helps the United States. It is best if he fails.
@Pch101: There is no scenario in which Trump’s success helps the United States. It is best if he fails.
The problem is that Trump failing is still going to hurt the US. I loathe Pence and the current national GOP, and it would probably help them, but Trump has to go. I want the country to succeed, and Trump being POTUS has to be bad for the country. If the GOP was remotely responsible they would be working with Democrats to investigate Trump and his people. Instead you have Nunes who is in the tank for Trump.
Trump succeeding is even worse.
At this point, we have to ride it out and rely upon checks and balances while endeavoring to get a Democrat to replace him in 2020. Democrats need to be riled up enough to show up, and a few more independents need to be convinced that the GOP is the worse of two evils.
Anything else is wishful thinking. I’m not sure how much clearer that it has to be — there is no scenario in which Trump can get what he wants without damaging the country. If he doesn’t fail, then the outcome is necessarily worse.
Trump does not have the political capital that Lyndon Johnson had or the Washington insider knowledge that Hillary would used. He therefore needs be a strong pragmatist. *
Johnson was the most skilled politician of our time. He literally towered over the other politicians. He was an artist in the use of political favors. Richard Nixon – the ultimate pragmatist. I well remember the night when he announced that he was going to China. People were literally stunned in disbelief: ” has he lost his marbles ? ” Republicans were for once speechless.
“The Art of the Deal” : maybe Trump needs to dust it off and re-read it.
I wasn’t talking about his vision of a successful foreign policy. I was talking about his handling of a crisis. Mucking that kind of thing up doesn’t return us to some default situation in which nothing happens, like when he failed to enact the Muslim ban or Obamacare repeal. It can cost lives, sometimes in the thousands.
Trump is what he is. You don’t get to pick and choose between various shades of Trump.
If Trump gets what he wants, then he will mishandle it spectacularly. If he doesn’t get what he wants, then it won’t be quite as bad.
There is no Good Trump scenario available outside of a fantasy tale. Derailing him while positioning his party for defeat in 2020 is the best case scenario now that he is in power.
Looks like the whole healthcare debacle isn’t helping Mr. Trump’s approval numbers any bit.
Considering it was ghost-written, he needs to read it for the first time.
Schwartz, the ghost, once said something to the effect that The Art of the Deal might be the only book Trump ever read.
These anti-Trump threads remind me of 2008-9, where the right side was in an empty-suit, smooth-talker tizzy over Obama’s election. Half the nation is unhappy all the time, it seems. Perhaps it reflects the larger conflict of ideologies between the progressive Democrats and the conservative Republicans, and this won’t go away any time soon. Each side has an “I win and you lose” attitude, which puts a block on good legislation initiatives. The other losers here are the public, no matter what. We, the public, lost the last 8 years to a Democrat, and it appears that we will lose again in the next few years to a Republican. Sic transit gloria.
Millions more insured, an economic death spiral averted, relatively free of terrorist attacks, expanded freedoms, a growing economy, reduced unemployment…the only thing that held back the last 8 years was a reflexively obstructive (bordering on traitor-ism) Republican party.
So much winning!!! Are you bored with all the winning, so far???
no no no no no.
We are looking at this all wrong… and until we can be honest with ourselves, then we will not be ready. That reasoning is dead.
This is THE feature, not a bug.
Yes, there were some “normal” conservatives that voted for Trump, because that is what the GOP is supposed to be. The Party is the Party, and you support the Party’s nominee.
Yes, there were some “cross-overs” that voted for Trump, as they really wanted change. Any change, as their lives were bad. They could not imagine it getting worse.
HOWEVER… there are those now in our society that just want to burn the whole thing down to the ground and have nothing but seething hatred for what we are today. Complete anarchy in an Alt-Right fantasy is their goal, and nothing will placate them.
Use logic, and you are a “liberal cuck”, only to be dismissed… they live in a self-sufficient anarchist fantasy, feeding on each others hate. Any right wing forum visited will have Pepe icons, and seething hateful comments.
What causes pain to ALL of us brings them pleasure. The far right has gone barking mad, and we are along for that ride.
They are the GOP base. They want you to fail. They want you dead.
As our front pager Dr Joyner said on another thread: ‘I don’t see how we sustain four years of this.’
What, exactly, do you think was lost under Obama that was Democrats’ fault? I’m extremely curious to know.
@Liberal Capitalist: Yes, I’ve noticed that those who want to live in a post-Armageddon country never think about where all the equipment and fuel and ammunition and food are going to come from….it’s always “;loot and steal from someone else.” What happens when all the stuff to loot is gone?
(We could probably save the US from a real mess if we simply handed out free video games and free video game equipment to anyone who wanted it. Let them carry out their Mad Max fantasies in virtual reality.)
At least one Trump loyalist has already abandoned him, namely, his wife. Little Baron is on Spring Break so they came to the White House of course, right? No, headed to Mar-a-Lago on the only weekend that the Donald isn’t there.
I suppose it’s progress that you’ve managed to reach the ‘both sides do it’ phase.
Now you just need to bring yourself all the way to the truth: Democrats are incompetent and fuzzy-headed, but they are still trying to help people. Republicans are not. There is no moral equivalency between the person who throws a drowning man a life preserver but misses by a few feet, and the man who throws an anchor.
Oh please, there really is no comparison between Obama and Trump, other than the facts that they are human and male…
By what basis, did we, the public, lose the last 8 years with Obama?
He took over with the worst economy since the great depression and was able to put together policies that have set a record for most consecutive months of positive employment.
Additionally, no major terror attacks, no new wars, a stock market that almost tripled from it’s lows, and resurgent housing prices.
I’m reminded of California. We were in the dumps. All it took was getting rid of the GOP in Statewide offices and getting a Democratic supermajority in both houses, and we’ve turned it around big time. Meanwhile, Kansas, Lousisiana, and the many of the GOP controlled states are close to a death spiral.
You’re delusional if you think the last 8 years were bad. Were you alive during 2000-2008?
Jeez. You’re part of the freaking problem if you think Obama was worse, or even equal to Trump and Bush.
@michael reynolds: Or calls out “guess ya shoulda learned how to swim, huh.”
@Pch101: I can’t wait for 2020 to vote for TRUMP AGAIN.
@DrDaveT: “What, exactly, do you think was lost under Obama that was Democrats’ fault?”
The illusion that white males are better than everyone else.
In today’s edition of ‘disturbing patterns’ we had AG Sessions appearing with Sean Spicer at the present version of the ‘five oclock follies’ to threaten ‘sanctuary cities’ and generally to spread fear and loathing of undocumented brown people. I guess the bad publicity of their past few days needed some distraction, eh?
Why is this bad? Seems to me like a good thing because we have a terrible president was in capable of doing anything .
@CSK: then maybe the idea of giving the president tremendous power was really a stupid stupid thing. Counting on the voting process to keep bad president out of office is stupid both theoretically and empirically.
…which is why the Founding Fathers were wise enough to establish an Electoral College, so that any such populist incompetent could not… Oh. Never mind.
@Steve Verdon: @DrDaveT:
The FFs never envisioned someone like Trump being elected to the presidency. Who could? I still can’t believe it.
@Robert David Graham:
Putin has already submitted his absentee ballot.
Yes, they did. Explicitly. That’s the point — they saw the danger of an unprincipled populist candidate, and built in a mechanism to enable the elite to push him to the curb. We disabled that mechanism long ago, out of aversion to elitism, but failed to put in something else capable of performing the same function.
It’s all there in The Federalist.
@Robert David Graham:
When I was in third grade, my elementary school had to cope with an inexplicable epidemic of kids deliberately poking pins through their fingers, or even stapling their hands. More than once per kid.
I wonder why I am so irresistibly reminded of that at this point…?
I’m taking this.
(I’m not saying I’m stealing it, because I’ll give you attribution!)
Humph, you type that as if Trump will actually be on the ballot in 2020…that’s a bit iffy at this point…
@Daryl’s other brother Darryl:
A Few Obama Problems
1. Obama has doubled the national debt, he inherited from Bush. Par for a tax and spend Democrat. We will soon be unable to afford any more than entitlements and the interest on the debt.
2. Obama lied the people, on Healthcare, Benghazi, and 73 other times. I cannot abide liars.
3. Obama left Iraq for ISIS to fill the vacuum. He had a pension for naming the dates of our withdrawals, giving the enemy a sterling chance to wait and see, and then move back in. Bright! We are now faced with fixing this Obama ISIS and Afghan problems the hard way.
4. Obama presided over the most inconsequential recovery from a downturn. 2% GDP growth or less over 7 or 8 years is really anemic, and some 60 million workers have quit looking for jobs and receive a government handout. The 4+% unemployment figure is false.
5. Obama created the sequester, and with he congress, imposed it on the military, leaving us with a seriously weakened military. He did not trust the generals. We now have serious shortfalls that will be hard to fund.
6. Obama courted the Islamic States with obsequious speeches, booted the reset with Russia, and was too deferential to China..
9. Obama surreptitiously championed the Alinsky Rules, and hobnobbed with Ayers and Jeremy Wright., with more than a tinge of Gramsci in his makeup. Steps towards socialism and eventually communism. Not to mention Acorn.
10.Obama gave relatively free reign to the EPA, which has cost small business big time in relatively unnecessary environmental regulations. He set out to kill the coal industry.
11.Obama is will noted for trashing or skirting the Constitution when it stood in his way.
12. He overdid the Executive Order route to often and too far.
13. He proposed a bright red line in the Syrian conflict and back away from it. Now we have to fix that one too.
14. He signed a treaty or accord with Iran that virtually guarantees they obtain Nuclear weapons in less than ten years. Really great statesmanship.
But enough for now..
Thank you, Mr. Levin, for that piece of talk radio tripe. It doesn’t merit any more of a response than that.
I disagree. I respect @mannning for actually posting a list in response to the challenge, and I think a couple of the items on it are legitimate criticisms of Obama. Specifically, #3 and #13 (handling of the withdrawal from the Middle East and involvement in Syria) are pretty much on target.
Of course, blaming Obama for a wimpy recovery (as if that were as bad as causing the crash in the first place) and sequester (which Congress inflicted on themselves with eyes wide open, no matter who first suggested it) is just silly. Complaints about the Iran treaty are based on a complete failure to understand what the alternatives were, and the conspiracy theory stuff is the usual wingnut Asperger’s list.
#3 was unavoidable. At some point, we had to exit from Iraq. No matter when that occurred, it was going to create a vacuum into which the instabilities and tribal rivalries which have characterized the region for the better part of at least 900 years would return. The alternative was staying there forever. We won’t even get into the fact that the exit occurred under the terms of a status of forces agreement which were negotiated by and signed by the Bush administration.
#13 – well, what do you do? Go to war over Syria? There is no good answer there either, as all of the players are pretty equally detestable and undesirable. No matter who wins, the world loses.
Nah, the guy is a partisan clown waving his my team pom poms. I give him the degree of consideration that he deserves – none.
I actually think one of Obama’s biggest mistakes was attempting to negotiate with the Republicans during the debt ceiling showdown in 2011 (a mistake he did not repeat two years later), which led directly to the sequester. Most of the blame lies with the Republicans, but Obama was like the frog in the story of the scorpion and the frog. The Republicans were ready to sting because it was just their nature. Obama’s failure to recognize that (at first) was a pretty consequential blunder.
Of course that’s got about zilch to do with any of mannning’s complaints.
It is quite in line with partisan lefties to ignore the national debt, and to champion even more entitlements, while the debt races past $20 Trillion at break net speed. It is a fact that by 2020 or so we will only be able to afford entitlements and the interest on the national debt. I wonder if democrats have the guts to vote for significant reductions in entitlements, or are they, like Trump, betting on a major rise in the GDP and hence revenue?
The 2016 elections and the people’s votes, changed the whole complexion of Congress and the presidency, and now we will see, and are seeing, a number of corrective actions from the Obama era. It is obvious that partisan lefties would ignore the Obama lies about Obamacare and Benghazi for just two very public ones! My opinion is that these are completely inexcusable LIES by a sitting President.
What we have done in the previous 8 years regarding the Middle East is to “Go Slow” and to use the Iran Treaty to delay the inevitable, and to put Israel in a precarious position, even to act hostile to them in favor of the Palestinians, or so it seems. My opinion is that there never will be Palestinian acceptance of Israel as a state, simply because it has dedicated opposition. Since the Muslim population has been surging, and will continue to surge, The West will be faced with a continuous migration deluge, and will be faced with a voting block that will alter our way of life.
We either face this situation now, or later at far greater cost. I, for one, do not want Sharia to take hold in our Republic, though I will not be around to witness it.
Oh please…most Republicans/conservatives only seem to worry the national debt when a Democrat is in the White House…
As for all the current problems in the Middle East, many of them could have been avoided if Bush’s disastrous Iraqi Adventure had never happened…
Oh for f@ck’s sake, anyone who seriously thinks he has to worry about Sharia in this country should seek immediate mental health aid, as he has more than a few screws loose…
Oh please, most Republicans/conservatives only seem to worry about the national debt when a Democrat is in the White House…
As for the troubles in the Middle East, most of them could have been avoided if Bush’s Iraqi Debacle had never happened…
Oh for f@ck’s sake, anyone who seriously believes that we will ever have to worry about Sharia in this country should seek immediate medical attention, as he obviously has a few screws loose…
No, I get that, and I agree. I was thinking more the way Obama talked about the withdrawal schedule in his public statements. I agree with manning that this could have been handled better, on more than one occasion. It’s not a major thing, but it’s a genuine criticism.
(The power vacuum in Iraq caused by our invasus interruptus was a foregone conclusion from day 1 of the war. That it was filled by ISIL was just extra sprinkles on top.)
Again, I’m thinking more of the talking than the doing. I don’t really have any complaints with Obama’s actual use of forces in Syria — if it wasn’t ideal, that’s only going to be apparent in hindsight. But the rhetoric and timing were suboptimal.
The actual, hard public debt isn’t anywhere close to $20 trillion. Evidently you’re incapable of distinguishing between actual debt and accounting debt.
Regurgitated talk radio garbage like that is why I don’t take you seriously.
And I’ll buy that to an extent, but the American people have a funny way of believing themselves to be entitled to know what’s happening. When you don’t tell them, they cheerfully fill in the blanks for themselves with stupidity.
Anybody with a brain (and, while they may be extremist religious nuts, these wankers in Iraq et al aren’t stupid) knew from December, 2008 that there was a negotiated line in the sand (December, 2011) set for American troops to exit the country. It wasn’t exactly kept secret when it was signed.
All I know is what is printed in this Debt Clock, and it is rapidly approaching $20 Trillion. By 2020 it will be quite a bit more. Just to be clear, I did not access any radio show. Someone even said I evidently listened to Levin, but that is hogwash. And it is true that I cannot distinguish between actual and accounting debt, which seems to be playing with tricky accounting gimmicks to fool the unwary. So what is the actual debt from your point of view? And, when will it exceed $22 Trillion, and support my contention that we will only be able to pay for entitlements and the interest out of revenue at that point? Educate me! You have challenged the debt clock’s authority.
The actual debt – that which actually has to be repaid to holders of treasury securities – is about 14.3 trillion, repayable over a variable time horizon depending on the particular series that stretches out to 30 years. It sounds like a great deal of money, until you consider that the US has a nearly $18 trillion economy. In simplistic terms, it’s rather like a homeowner who earns 180,000 per year owing 143,000 on a 30 year mortgage.
The rest is meaningless intragovernmental debt. You could wipe it out of existence tomorrow and it wouldn’t change federal cash flows or the fisc in the slightest.
The federal government currently collects 3.632 trillion in various tax revenues, or roughly 20.1% of GDP. I will agree with the contention that we could find ourselves in a position where we are able to pay nothing but entitlements and interest on the debt IF we maintain tax revenues at their current level / do nothing to adjust them in response to changing obligations.
But, of course, who in their right mind would do that? We’re currently the third lowest taxed country in the OECD, and we collect less in taxation now on a percentage of GDP basis than we have in decades (under Reagan, for example, it was in the range of 26.4% to 27.4%).
Moral of the story: we have a great deal of headroom within which to adjust tax policy to cover funding needs. All of these chicken little “oh god we’re going broke” stories only serve a purpose if your goal is to use them as a motivator to strangle government spending in order to bolster your own wallet.
I appreciate your reply. Do you have a reference that I can use to track the actual ND? Given that the ND is actually under $15 trillion, instead of nearly $20 trillion makes a huge difference in our ability to stay afloat. Now the question is why show a number like $20 trillion at all? What accounts for the difference of around $5 trillion? The other problem is the rapidly rising cost of entitlements as millennials retire, which leads to a massive unfunded liability rather soon.
Treasury publishes the national debt numbers, to the penny, daily. You can find that here
The difference is what’s called intragovernmental debt – i.e. debt that the government owes to itself. This is comprised primarily of the “trust funds” associated with entitlement programs like OASDI, etc.
People erroneously think that Social Security functions, or at one time functioned, like an annuity. Money comes in, gets banked into a special account & invested, with the returns & principal available at a future date to fund benefit payments. This is not the case. OASDI is, and always has been, a pay as you go social welfare benefit funded in real time by a tax. Historically, the tax has generated (and was intended to generate) more revenue in a period than required to fund benefit payments in that period. The difference is required by law to be invested, but the law is written in such a way that the only investment vehicle which can satisfy it is special Treasury bills. If you understand government cash flows, you’ll know that investing funds in Treasuries, of any sort, results in the invested funds moving to the general fund, where they are spent as revenue. Note that Social Security has worked this way from day one. It was easier to generate tax revenue to pay for New Deal spending by calling it a retirement plan, so that is how it was sold. There has never, ever, been a fund with actual money in it set aside for paying future benefits. It has always been nothing but intragovernmental debt.
So it works like this (a hypothetical):
$100 of OASDI taxes comes into Treasury in a period. Treasury has to pay out $50 in SS benefits during that period. This leaves a $50 surplus.
That $50 surplus will be “invested” into a special form of Treasury bill. This bill will be credited to the “trust fund” and the actual $50 goes into the general fund (and gets spent). The net result is that government “owes” itself $50. Hypothetically, at some date in the future, that bill represents a cash flow of $50 plus interest to be used to fund future benefit payments (which is specious, because)
These are all just accounts within Treasury. They all live on the same unified set of books. There is only one source of funds – incoming tax revenue – from which government could repay itself the $50 plus interest, so it makes no difference whether you take the $50 plus interest, move it to the “trust fund”, cancel the associated bill and use the money to pay benefits or just pay the benefits directly from the general fund & cancel the associated bill in the “trust fund”.
Because it’s the same money. Wipe out every cent of intragovernmental debt and you’d be left with exactly what you already have – incoming tax revenues funding outgoing SS benefit checks in real time. It’s useful only as an indicator regarding how much surplus has been spent as revenue in the past.
Social Security, honestly speaking, is easy. It is closed ended – it has a known, finite payout in any given period, so you tweak either the withholding rate, the wage ceiling, or both, to generate revenue sufficient to fund the required benefit payments. Medicare is the bigger worry, given the more open ended nature of the program (there is effectively no ceiling on what can hypothetically be paid out for Medicare benefits in any given period). We will, at some point, have to accept that keeping these programs will mean setting tax rates sufficient to fund them.
Forgot to answer a question:
The entire amount gets presented because, back in the 1960s, we moved to a unified budget. Pretty much all government revenue & expenditures moved on budget in order to present a unified picture of government finances. Prior to that time, OASDI et al lived off budget. The surpluses that were flowing into the general fund served to offset presented deficit numbers, but the debt that lived on the other side of the transaction wasn’t reported.
Note that this change didn’t affect the overall nature of the fisc; it just changed (and in a way that made it more accurate) how the numbers were reported.
“In the United States, intragovernmental holdings are primarily composed of the Medicare Trust Fund, the Social Security Trust Fund, and Federal Financing Bank securities. A small amount of marketable securities are held by government accounts. 
The value of intragovernmental debt holdings as of February 21, 2017 is $5,531,705,453,238.55”.
It seems to me that sooner or later these funds must be made whole, and I have a damn good idea who will catch the brass ring.
They are made whole as future benefit payments, and that will happen in the future from the tax revenues which are coming in at that time. Whether the securities exist or not, the transaction is the same.
Think of it this way: future benefit payments represent a liability on the government’s books. The securities in question represent an imputed asset of equal value on the same set of books.
They zero each other out. The fundamental problem is that the securities themselves do not represent actual value. Redeeming them does not result in a single additional penny flowing into Treasury. They represent existing funds moving from one account in Treasury to another account in Treasury.
As I said before, whether you redeem the securities by moving money from the general fund to the trust fund, and then pay benefits from the trust fund, or just pay the benefits from the general fund & cancel an equivalent amount of securities in the trust funds, the net result is the same. It’s the same pool of money – incoming tax revenues – paying the benefits.
Consider a hypothetical: for some unknown reason, tax revenue falls to zero in a certain period. There is subsequently zero money in the general fund, to pay for anything. It will quickly become clear how meaningless the debt represented by those securities sitting in the trusts is – because there would be no money in the Treasury to redeem them with.
The securities are essentially worthless, because they represent an intermediary claim on the same assets (tax revenues) that would be used to pay the benefit checks if the securities didn’t exist. In and of themselves, they do not represent an additional dime of liability
Think of it this way: You give me $5, with the promise from me that I’ll give you $7 next month. I spend your $5, and put an IOU to myself in my left pocket to cover the $7.
Next month, all the money that I will have is my paycheck. I can either take the $7 that I owe myself, put it into my left pocket, tear up the IOU and then pay you that $7, or I can pay you $7 directly from my paycheck and tear up the IOU (this is actually what happens with OASDI).
It makes no difference which one that I do, because it’s all the same money. If I had lent your $5 to Fred, I could expect to collect from Fred and then pay you with Fred’s money, but I didn’t. I lent it to myself, so the only money I have to repay it to myself with is – my own money.
Short version: you can think about future SS payments, or you can think about redeeming trust fund securities in the future, but you can’t think of both of them – because they represent the exact same thing.
In other words, it’s not $5 something trillion AND future SS benefit payments. It’s $5 something trillion OR future SS benefit payments. You can only count it once
because the both represent the exact same debt.
Very good of you to explain these matters in some detail. Thank you.
I believe my idea of who ultimately pays was on target. So, from a taxpayer’s point of view, we will be eventually paying another $5 trillion later, on top of the $14+ trillion of today’s actual debt, which adds up to a full $19+ trillion the taxpayer is obligated to pay. Is this correct?
Maybe more, depending on what time frame one is discussing, as social security benefit payments continue ad infinitum unless / until the program is actually cancelled.
That having been said, same concept – that $5 trillion doesn’t correlate in any meaningful way with future benefits due over an infinite time horizon. We can’t say “we have $5 trillion of X due at this point in the future”. It represents spending of past surpluses; it doesn’t quantify future benefits due. For that, you need an actuarial analysis.
At some point in the future if/when OASDI receipts in a given period fall below benefit payments due in the same period, the outflow will begin to deplete the securities balance (as there will be no surpluses to spend, ergo no creation of new securities to replace those being retired). Eventually, that debt pool will fall to zero, but – and this is the important concept – the benefit payments will continue regardless. So, in a way, you can say that the current intragovenmental balance represents a portion of gross future benefits due over the long term, you can’t say that once that pool has been retired that the overall exposure has been eliminated – because the benefit payments continue to infinity unless cancelled. Make sense?
So far, so good! One question remains: Looked at from a foreign investors view, which of the numbers matter to him when considering further investment in US Treasuries?
I really appreciate your tutelage here, it may well settle some of my concerns for the future.
A significant chunk of foreign investment in treasury securities is conducted by central banks in countries that are on the surplus side of trade relationships with the US. It’s one of the ways that they reinject the massive piles of dollars which accumulate on their side of the relationship back into the US, so that American consumers can use them to – you guessed it – buy more stuff from them. Without that, eventually there would be relatively very few dollars left in the US and their trade relationships would suffer. There are other reasons, namely the perception that Treasuries are default proof and indexed for inflation (essentially you can park funds in them and you are protected against any sort of loss, including depreciation of buying power through inflation).
The bottom line is that market isn’t going away. China, for example, can’t stop trading with the US, so it does what it has to in order to keep the trade going.
I thank you again for your tutorial.
There are many finance issues one might want to explore beyond the subjects covered here, but the basis is set now. Several of these issues include: The Federal Reserve state of being; inflation; the significance of the velocity of money; the dollar as the world reserve currency and efforts to change it, The IMF situation; trade imbalances; massive unfunded obligations at both the federal and state levels; the budget, taxes; and on and on…
This has to be a place to end the conversation, else it will become a book!