Tag: economy

US National Debt Exceeds Size of Economy for 1st Time Since End of World War II – Reports

The US national debt exceeded the size of the country’s economy at the end of March for the first time since the end of World War II, Fox Business reported, citing data released by the Bureau of Economic Analysis.

The Bureau reportedly estimated on Thursday that the national debt held by public amounted to $31.27 trillion as of March 31. GDP at that time was estimated at $31.22 trillion, meaning the US national debt exceeded 100% of the country’s economy.

Last time such a situation was observed in 1946, when the percentage of public debt to GDP was 106%, the report read.

On Thursday, Fitch Ratings suggested that US national debt, under its baseline scenario, would exceed 120% of GDP no later than 2027. The US public debt-to-GDP ratio was 116.6% in 2025, will reach 119.3% this year, and will increase to 122.2% in 2027, the agency estimated.

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Soon Comes The Mother of All Supply Shocks

It’s getting pretty hard to tell who is more delusional: The Donald or the noisy boy band of school-yard incompetents that surround him.

Either way, it’s not surprising that Trump posted this missive earlier today. He apparently actually thinks that his cockamamie Iranian War, which is on the edge of stalemate or actually being lost, is nearly all over except for the shouting.

Of course, it’s no mystery as to where the Donald is getting his utterly misplaced optimism. To wit, almost every POTUS of modern times – financially challenged or solid in his own right – has had a strong Secy of the Treasury to keep him tethered to reality.

After all, Herbert Hoover had the outstanding Andrew Mellon. FDR finally got himself anchored down by the capable Henry Morganthau. And General Eisenhower, who was himself no slouch on fiscal matters, had the rock solid midwestern banker, George Humphreys.

Likewise, economics were not JFK’s strong suit, but all matters financial were second nature to his Treasury Secretary, Douglas Dillon. And even after his screw-ups at Camp David, Nixon turned to the brilliant Bill Simon, while the peanut farmer from Georgia had the world class industrial CEO, Michael Blumenthal at the Treasury post.

Contrary to the main stream stereotype, Ronald Reagan was actually deeply learned on economic matters, but even then he had the exceedingly capable Jim Baker at the Treasury during this second term. Similarly, Clinton had Wall Street titan Bob Rubin and G. Dubya Bush had the exceedingly capable Paul O’Neill.

Not the Donald. The first time around he had a Goldman Sachs nepo baby, Steven Mnuchin, whose economic policy grounding was as razor thin as the Donald’s. And now he’s got former George Soros, trainee, Scott Bessent, who apparently fancies himself to be a big think strategist, who actually doesn’t know shit from shinola on most matters within his brief.

So in even more declarative terms than the Donald, Bessent now tells us that the Iranian’s are literally days away from waving the white flag of surrender because he and the Donald have constipated their oil wells with the naval blockade.

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Trump presented with RISKY secret Iran plan using US ground troops as oil prices plunge global economy into chaos

Donald Trump may escalate the Iran war by sending ground troops to reopen the Strait of Hormuz and deploying special operations forces to seize the nuclear materials the regime needs to build a bomb.

The President’s top military advisers are set to brief him on new options for military action designed to force Iran back to the negotiating table and end the war.

CENTCOM’s secret plans include using ‘short and powerful’ strikes on Iranian infrastructure to force Tehran to show more flexibility on ending its nuclear program, according to Axios.

It would amount to the most intense US combat activity in Iran since the beginning of the month, when Americans staged a high-stakes rescue of downed crew members. 

One plan Trump is expected to review calls for reopening commercial shipping in the Strait of Hormuz with US ground troops. The passage, which transits one-fifth of all global oil shipping, has been stalled for seven weeks.

Another strategy the President will hear involves using special forces to enter Iran and recover its stockpile of highly enriched uranium. During prior negotiations, the regime refused to hand over the nuclear material to the US.

After peace talks stalled earlier this month, Trump imposed a naval blockade on all Iranian ports in the Gulf.

Tehran, meanwhile, has shut down oil shipping lanes by attacking tankers with speedboats and laying sea mines in the strait.

Trump’s new pressure campaign to reopen the strait comes as the global oil market has plunged into chaos, driving US gas prices to their highest level per gallon since 2022.

US gas prices rose another 7 cents on Thursday to $4.30 for a gallon of regular, the biggest one-day jump in prices since the start of the war. 

Gas is now at its highest price since the consumer inflation crisis of July 2022, according to the data from AAA. 

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Corn Belt Politicians Are Using High Gas Prices To Push Even More Carveouts for Ethanol

With the average price of gasoline in the U.S. reaching its highest level since the start of the Iran war, lawmakers are thinking about giving energy producers special treatment to supposedly cut costs at the pump.

As part of the negotiations over the Farm Bill, which is expected to be voted on by the House of Representatives this week, a bipartisan group of Corn Belt lawmakers is proposing a measure to authorize the sale of E15—gasoline with an ethanol content up to 15 percent—year-round. This fuel is typically not allowed to be sold in the summer months because it evaporates easily, which contributes to air pollution and smog. (The Trump administration waived requirements last month to allow for E15 to be sold this summer, citing high gas prices.)

The proposed amendment would also limit blending exemptions for small refineries under the Renewable Fuel Standard (RFS)—the federal law that requires refiners and fuel importers to ensure that a certain percentage of the transportation fuel sold in the U.S. comes from renewable fuels, the most common of which is ethanol. Compliance with the RFS is estimated to cost refineries about $70 million in both 2026 and 2027, according to the energy consulting firm Turner, Mason & Company.  

“At a time when consumers are acutely sensitive to energy prices, this amendment represents a pragmatic solution that balances energy affordability, rural economic strength, and regulatory certainty,” said a coalition of agricultural and energy groups in a support letter for the measure. Additionally, its reforms to RFS exemptions “will help restore transparency and predictability for all parties subject” to that law. 

It doesn’t seem like “all parties” are on board. 

Last week, the National Corn Growers Association published a press release calling out a group of “oil corporations” for attempting to “derail legislation that lowers fuel prices.” 

“There is a tiny minority of major energy corporations – like Delek U.S. Inc., Cenovus Energy, CVR Energy, HF Sinclair, Parr Pacific Holdings and Suncor Energy Inc. – that are masquerading as small refineries to get Renewable Fuel Standard exemptions they don’t need,” said the association’s president, Jed Bower. “Their greedy actions are holding up legislation that would help farmers who are struggling during tough economic times.”

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Fury as NYC on course to join Detroit, Chicago and Puerto Rico with woke mayor Mamdani’s latest reckless plan

Fury is mounting as New York City drifts closer toward the same fiscal traps that have crippled Detroit, Chicago and even Puerto Rico.

It comes after Mayor Zohran Mamdani began exploring a controversial plan to delay billions in pension payments as City Hall scrambles to plug a growing budget hole.

The proposal – now under discussion with state officials – would allow the city to push back retirement contributions into its vast municipal pension system, freeing up at least $1 billion in the next fiscal year.

But critics warn the move amounts to little more than kicking the can down the road. It would swap short-term relief for a far bigger bill later, and risk problems that have pushed big cities to crisis in the past.

The city currently faces a $7.1 billion budget gap. As Mamdani resists significant spending cuts, he is considering delaying required payments to city pension funds as a temporary fix. 

For now, the city remains on track to meet its long-term pension funding obligations by its 2032 deadline. 

Mamdani’s team said in a statement to the New York Times that it has not started ironing out the details of the proposal and that any changes would likely push the deadline beyond 2032.

Any delay to the pension plan would require the approval of New York Governor Kathy Hochul. 

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Stagflation Incoming: The Donald Ain’t Gonna Like What Happens Next!

Here is a salient place to start regarding the economic impact of the Donald’s misbegotten war on Iran: To wit, approximately 7 billion ton-miles of freight moves by truck each and every day in the USA, which heavy truck fleet consumes upwards of 2.9 million barrels per day (mb/d) of diesel fuel.

Alas, the price of diesel fuel was about $3.55/gallon both a year ago and as of early January 2026, but has since soared by more than+$2.00 per gallon to $5.60. That’s a 56% rise in the cost of pumping goods and commodities through the arteries of the US economy. On an annualized basis, the diesel fuel bill for the US truck fleet went from $155 billion per year to $250 billion per year at current oil prices.

The big question, of course, is through which channel these drastically higher fuel acquisition costs will be absorbed – in higher prices or reduced output? And that pertains not just to the microcosm of the trucking sector, but the entire GDP now being battered by the Donald’s elective war-based dislocation of the world’s 175 million BOE/day oil and natural gas markets.

We’d bet it will be a combination of both inflation and deflation, otherwise known as stagflation. The mix of these outcomes depends upon supply and demand conditions in individual sectors of the economy in part, but also, and ultimately and more importantly, on the Fed. That is, whether the nation’s central bank pumps incremental demand into the economy via credit expansion with a view to “accommodating” the soaring price of energy today, and, soon, food and other commodity inputs to GDP, too; or holds firm on the printing press dials and allows the now cresting energy and commodity shocks to work their way through the interstices of the $30 trillion US economy.

Of course, during the previous comparable petroleum supply disruption during the 1970s, the Fed made the huge mistake of printing the money to counteract what was a “supply shock” in the form of soaring petroleum prices. But that led – just as sound money advocates had always held – to double digit increases in the general price level by the end of the decade, and thereafter the trauma of the Volcker administered application of the monetary brakes.

With the Fed fixing to welcome a new Chairman, as today’s congressional hearings remind, it is therefore a question of whether or not the Kevin Warsh Fed will want to take its place in the monetary policy villains gallery along with Arthur Burns and the hapless William G. Miller.

We think not. We actually believe that for the first time since Volcker, we are about to get a Fed chairman who understands the requisites of sound money and noninflationary finance, as well as the profound error of Keynesian demand management at the central bank.

And not only that. As far as we can tell, he also has the experience from his prior service on the Fed during the so-called Great Financial Crisis and the cajones to lean heavily against the supply shock now emanating from the Persian Gulf.

Of course, in a perfect world of honest money and free markets – including in the production of money and credit – there wouldn’t be any central bank “leaning” to do. Under an honest money gold standard, for instance, the impending petroleum supply shock would cause relative price changes, thereby generating a sharp curtailment of activity in petroleum intensive sectors and the reallocation of activity, output, jobs and capital to less petroleum intensive sectors. That’s what the miracle of free markets do when they are allowed by the state to operate.

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Netanyahu and Zionism is Pushing the World Towards Economic Catastrophe

As has often been the case since the Iran War has started, the U.S. corporate media, whether “left” leaning or “right” leaning, is reporting news on this war that is far different from what is being reported outside of the U.S. media.

So here are two very recent interviews that are both only about 30 minutes long, giving the “other side” of what actually happened this past weekend with the negotiations in Islamabad, which were “led” by JD Vance, as well as views on the alleged current “blockade” of the Strait of Hormuz by the U.S. military.

The Wall Street Journal had actually published a story stating that the U.S. was going to assassinate the delegation from Iran, which forced them to return to Iran in secret after the meetings ended.

Professor Seyed Marandia, who lives and teaches in Tehran and is a U.S. citizen, was actually at the negotiations, and at the time of this writing this is his most recent interview with Glenn Diesen.

He states that the Iranians fully expect a resumption of attacks by Israel and the U.S., and that they are preparing for it.

He stated “Netanyahu and Zionism is pushing the world towards economic catastrophe,” and he also stated that if they attack Iran’s energy infrastructure again, they will start attacking the infrastructure of the rich Arab Gulf States, starting with the UAE, which he states that they can completely destroy in 1 day.

Marandia also states something that I can personally confirm is true, which is that the Arab States around the Arab Peninsula are heading into their summer season, where it gets unbearably hot, where during the day nobody does anything outside, as it is too hot, and that U.S. soldiers would never survive day operations in such heat.

Iran’s summers, by contrast, do not get that hot, and he said that in Tehran today one can look at the mountains to the north where there is still snow on them, and that one needs a jacket to go outside.

I lived in Saudi Arabia for almost 4 years back in the 1990s, and stayed in the Kingdom through one summer, as I was teaching English at their university, and I made double pay for teaching during the summer as most foreign teachers returned to their home countries in the summer.

Air conditioning during those times is a life and death situation, and when someone’s air conditioning went out in the faculty housing, it was imperative that it was fixed immediately, and they had a large staff running the energy infrastructure, mostly Filipinos at that time.

So when Marandi says that if the power goes down in any of these Gulf States during the hot season EVERYONE will need to leave, he is not lying, but speaking the truth.

In the second interview between Pepe Escobar and Judge Napolitano, Escobar states that the Iranians will NOT return to Islamabad for the second round of “negotiations,” but will only agree to a place in either Russia or China.

Russian diplomat Sergey Lavrov is in Beijing today, allegedly assuring China that Russia will continue supplying oil to China if they cannot get it through the Strait of Hormuz.

Escobar also states that there is no actual blockade of the Strait of Hormuz at the present time.

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US to Create 4000-Acre High-Tech Economic Security Zone in the Philippines

The United States and the Philippines are set to build a 4,000-acre industrial hub after Manila became the latest government to sign up to a Washington-led initiative to secure semiconductor supply chains needed for artificial intelligence, the U.S. State Department announced on April 17.

The move makes the Philippines the 13th country to join “Pax Silica,” an international program that aims to secure the full technology supply chain, including critical minerals, advanced manufacturing, computing, and data infrastructure.

The initiative is a key aspect of President Donald Trump’s economic strategy aimed at reducing the United States’ dependence on rival nations and strengthening cooperation among allied partners, with the State Department describing it as “a positive-sum partnership of nations who want to remain competitive and prosperous.”

Other signatories to Pax Silica include Australia, Finland, India, Israel, Japan, Qatar, the Republic of Korea, Singapore, Sweden, the United Arab Emirates, and the UK.

The new hub will be erected in New Clark City, the Philippines’ planned metropolis north of Manila, which is owned and developed by the government through the Bases Conversion and Development Authority (BCDA).

New Clark City sits within the Luzon Economic Corridor, a strategic hub that includes Manila and neighboring regions to the capital.

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Will Americans Keep Paying a ‘Tariff Tax’?

When Eileen Nusselt and Gio Cox got married earlier this year, they skipped the traditional registry and asked their guests to donate to a home renovation fund. Yet as tariffs have pushed up the price of materials like lumber and paint, that money isn’t going as far as they expected. 

“We’re having to cut off projects that we really want to do,” said Cox, who lives with his wife in Charleston, South Carolina.

Many of the Trump administration’s signature tariffs were struck down earlier this year, but the couple doesn’t expect prices to fall anytime soon. “What incentive do any of these big companies have to lower their prices?” Nusselt asked. Especially, she added, “if they’re getting money back” from the government in the form of tariff refunds.

After the Supreme Court ruled in February that the Trump administration lacked the authority under emergency economic powers to levy many of its tariffs, the Court of International Trade ordered the federal government to process refunds — plus interest — to the more than 330,000 companies that have paid roughly $166 billion in tariffs now considered illegal. Since then, more than 2,000 companies have filed suit against the federal government to demand their refunds.

American consumers, however, will likely not be compensated for the tariff costs they bore, passed on through higher prices. Indeed, as taxpayers, they may be responsible for the interest that accrues each day the government does not process refunds.

But the cost of tariffs largely fell on shoppers, not companies.

Transferring Tariff Costs

According to analysis from the Budget Lab at Yale, prices of consumer goods (excluding more volatile food and energy) rose more than 2% throughout 2025 and into January 2026, reversing recent declines and adding to evidence that the costs of tariffs are being passed on to consumers. 

Tariffs accounted for an estimated 86% of the rise in prices for imported household goods through January, with the passthrough even more pronounced for long-lasting durable goods like cars, appliances and furniture, the Yale researchers found.

Some company leaders have spoken publicly about incorporating tariffs into their pricing. In a call with investors last May, Walmart CEO Doug McMillion said the retail behemoth would “do our best to keep our prices as low as possible,” but also that “higher tariffs will result in higher prices.” In an August 2025 earnings call, Home Depot Executive Vice President of Merchandising Billy Bastek spoke of “some modest price movement” due to tariffs.

Amazon CEO Andy Jassy told CNBC in January that the company stocked up on items  before the tariffs were instituted to keep prices low, but that supply ran out last fall. “You start to see some of the tariffs creep into some of the prices,” he said.

An analysis by congressional Democrats on the Joint Economic Committee found that American consumers paid more than $231 billion in total tariff costs between February 2025 and January 2026, amounting to roughly $1,745 per household.

“Tariffs are regressive in nature, and they impact low- and middle-income families more than wealthy individuals,” said Ryan Mulholland, a senior fellow focused on international economic policy at the liberal think tank Center for American Progress. Lower-income people not only spend a greater share of their income, they’re also more likely to buy cheaper, imported items — the kind likely subject to tariffs. At the same time, tariffs may contribute to inflation more broadly, which also disproportionately affects households with less financial flexibility.

“As budgets get tighter, tariff pressures bite more,” said Mulholland. Indeed, researchers at the Budget Lab at Yale found that, as a share of income, tariffs may burden the poorest households more than three times as much as the wealthiest.

Currently, only “importers of record” are entitled to refunds per U.S. trade law, and companies don’t have a legal obligation to pass any of that money on to the consumers who paid higher prices.

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The Quiet Carnage of California’s Minimum Wage Hikes Obsession Continues

Once upon a time (aka a couple of years ago), many others and I predicted California’s rush to jack various minimum wages would invoke the law of unintended (dire) consequences, which would also be completely ignored as lessons go. 

The ‘Clueless, Pandering Democrats Bone Working Stiffs and Business Owners Yet Again’ Maxim

This particular 2023 post dealt with two specific laws taking effect in April 2024 that boosted the pay of company/franchise-owned fast-food workers to $20 hr ($4 above the state minimum wage of $16 for everyone else), and healthcare workers were boosted into the $18-23 hr range depending on the job description thanks to some heavy union lobbying and creative job category reclassifications. 

For businesses like Pizza Hut, that meant their delivery drivers now fell into the $20/hr employee bracket, too. For many of those drivers, this law meant they were the first to receive pink slips, and almost immediately, as businesses scrambled to find savings ahead of the law coming into effect.

…Right now it’s about 1200 jobs gone at these franchises.

…“Well, I knew that was coming. All these big corporations they have to make money,” said Scot Ward, owner of Stone Pizza in Roseville.

…”What these businesses are going to do is cut out employees to make up for the money they are losing,” said Ward.

One year later, as the California Globe reported, the National Bureau of Economic Research issued its findings on the first full year of the minimum wage law AB 1228’s impact on CA workers’ new and improved quality of life. It seems the law had had very much the opposite effect, from outright job losses to decreased hours for those lucky enough to retain their employment.

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