And that is a very good thing because all the chips have been bet and then doubled down again on one of the biggest gambles of our lifetimes: that the United States can grow its way out of a staggering national debt and a choking chronic deficit during a political age in which Congress simply cannot enact meaningful austerity and reduce the deficit. Trump has done what perhaps no one else could have done, he has worked his magic and bought time for the gamble to pay off.
Meanwhile, a rescission bill has made its way through the Senate now goes onto the House, but that is only for a puny $9 billion and the odds-on passage are not certain. So the gamble pretty much remains as it was: that we can climb out of our deficit hole with growth and with virtually no budget cutting.
What's at stake? The bet is existential, our margins have grown so thin due to generations of profligacy that we run the risk of a death spiral. Or, the bond market may stay away from the bidders' window and we simply could not sell the bonds needed to roll over our debts at an interest rate that does not itself bring ruin.
What are the risks to this gamble? Any black Swan. That includes but is not limited to inflation, depression, war, pestilence, world trade embargoes etc. By definition, a black Swan is that which was not and probably could not have been anticipated. History warns us we certainly should anticipate a recurrence of the calamity of Trump's growth trajectory when hit by Covid. Even more to be anticipated, but no less calamitous, would be loss of offices to Democrats.
So we are running an existential gamble, yet one that is probably the most rational way out considering the risks and considering the fecklessness of Congress. Trump deserves credit for this choice. I wish more austerity could have been introduced into the mix but Trump clearly has a realistic appraisal of the state of the politically possible.
We are now in a place where getting rich is not only satisfying but virtuous, it also means salvation.
