For the Trump administration, the luster from the tax cuts, the Davos speech, and the State of the Union, has worn off. Consider the on-going reality of MemoGate (the attack on the FBI and DOJ), the major decline of the stock market, troubling new economic data, the continued DACA/immigration stalemate, and the budget crisis — leaving us at the precipice of another government shutdown and possibly a constitutional crisis.
Economic data on a rise in wage growth which should be considered a positive development spooked the financial markets. Why? Rising real wages would cut into profit expectations and thereby reduce share prices. There is also the fear of the economy heating up and bringing back inflation which would be met with rising interest rates. Our rising deficits (partly due to the tax cuts) will require more government borrowing. All in the context of what many feel to be existent stock and bond market bubbles.
The budget debate to fund the government will force the issue of the sequester. This limits the amount of spending on defense and non-defense categories. The GOP wants to increase defense spending yet freeze non-defense spending.
The Democrats want to raise non-defense spending by an amount equal to defense spending increases.
This past weeks’ actions by the House Intelligence oversight committee and the Trump White House, i.e. the Nunes Memo release and the Democrats/Schiff criticism has placed both sides in corners where little cooperation and compromise is possible.
Stephen Stamos Jr.,