Home 2017 Social Security The 2017 Social Security Fix Is Another Trump Debacle

The 2017 Social Security Fix Is Another Trump Debacle

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The trade talks with China hit a few snags, again. Some news reports say Huawei’s CFO Meng Wanzhou maybe Trump’s ace in the hole. He might use Wanzhou when Canada sends her to the U.S. to stand trial for breaking U.S. sanctions against Iran.


Former U.S. Ambassador to China Max Baucus said no matter what deal Trump claims as a victory, getting it implemented in the communist bureaucracy will be a nightmare.


What Mr. Baucus discovered, after being immersed in Chinese culture for three-years, is local governments tend to do their own thing when it comes to listening to Beijing. They may not carry out the central government edicts for a variety of reasons. But Baucus said that won’t prevent the central government from signing a deal with Trump.


The former Ambassador to China also said any trade deal won’t produce immediate results. It could take six years to see change, according to Baucus. Mr. Trump wants to hold the Chinese accountable for living up to the deal. But the Chinese know the longer they wait to make a deal with him, the more political heat he’ll endure. Investors think the market will react in a positive way if Trump claims a trade deal victory. But just like his Social Security victory, it won’t last long.


Mr. Trump thought he found a way to bring more revenue into the Social Security piggy bank when he pushed the Tax Cuts and Jobs Act through Congress in 2017. Trump said lowering unemployment, increasing wages, and pushing more consumer spending would increase economic growth, and that would result in more payroll tax collection.


Trump’s Tax Cut and Jobs Act lowered tax rates and cut corporate taxes. Those two changes produced a $3.2 billion surplus in the Social Security piggy bank in 2018. But now that all the smoke is out of the tax cut, and the U.S. economy keeps taking hits from Trump’s incompetence, the surplus in Social Security holdings is history. During the first quarter of 2019, Social Security holdings drop $9.03 billion. For the first time since 1982, Social security pays out more money than it takes in.


Mr. Trump recent decision to send border traffic agents to other locations while commercial traffic kept piling up, will have another impact on Gross Domestic Product Growth. At the beginning of the first quarter of 2019, government economists projected 2.1 percent GDP growth at the end of the year. GDP growth in 2018 was 3.9 percent.

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