Here's how Donald Trump's looming debt tsunami could end up crushing everyone -- except the 1 percent
Press conference by US President Donald Trump at the NATO Summit in Brussels. (NATO photo)

Bullies like Donald Trump consolidate their power by dividing the population, and then  by creating a crisis which further fractures the polity. If they can at the same time make their cronies richer, why so much the better.


This article was originally published at Salon

Consider the president's pre-Labor Day “gift” to federal civilian workers when he tore up their scheduled 2.1 percent pay hike, while letting the 2.6 percent raise for the military stand.

Smooth.

The divider-in-chief blamed this White House double cross of the civilian workforce on the massive mound of debt that’s piling up on the U.S. government’s balance sheet.

“In light of our Nation's fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets," Trump wrote in a letter to the congressional leadership, striking a pose of  fiscal rectitude.

Title V of the U.S. Code permits the president to unilaterally suspend a scheduled pay increase if he believes there is a "national emergency or serious economic conditions affecting the general welfare."

But what if he created the “national emergency”?

It is a great tool. And rest assured it is another Trump pyramid scheme.

The three-track evil genius behind the Trump-Ryan-McConnell $1.5 trillion tax cut, heavily weighted to the wealthiest individuals and largest multi-national corporations, wasn’t just that it opened the spigots for CEO bonuses and multi-billion dollar stock buybacks for Republican donors. It also sharply reduced the revenue coming into the federal government.

Once you can cite the huge looming debt tsunami, you have created a pretext for slashing food stamps, Medicare, Medicaid and Social Security -- just as a matter of "prudent" fiscal policy. But it’s not just the historic chance to toss tens of millions of undeserving Americans off the cushy sofa of government entitlement that’s got these elected minions of vulture capitalism so excited.

Instead of funding social welfare, the U.S. Treasury will be paying out debt service that goes to them and their friends as investors.

“The Congressional Budget Office still projects debt rising very quickly, with particularly fast growth in the amount America spends on its debt interest payments,” reports the Washington Post. “Interest costs are expected to approximately double as a share of the economy over the next decade and even overtake the cost of funding Social Security — the biggest expenditure in the Federal budget by 2048.”

So the most enduring gift to the well-heeled is that in place of a social safety net, Trump-Ryan-McConnell have cleared the way for Uncle Sam to float hundreds of billions of dollars in U.S. Treasury bonds to pay off the debt. They and their wealthy campaign donors can profit off all this, while avoiding state and local taxes on that windfall.

This is the foundation for wealth-building from one generation to the next. This “starve the beast” policy is actually an articulated objective of Trump and the GOP. It helps the princes of the private sector continue to amass ever greater concentrations of capital as government revenue is replaced by structural debt that they get to buy and speculate on -- whether or not they hold political power.

The dirty little secret behind all this is that buying government debt, whether issued by federal, state or local government. is one of the mechanisms by which the wealthy get wealthier. That's because the interest paid on these instruments is, to varying degrees, tax-free.

Of course, none of this is risk-free. It’s all a huge gamble. What if the ruling elites get too greedy and too much debt is created?

Back in June, the Congressional Budget Office warned that the $1.5 trillion tax cut, pushed through by Trump and his Republican allies in Congress, was adding so much to the national debt that it heightened the risk of another financial crisis.

Currently, the federal debt sits at $15 trillion, which is roughly three-quarters the size of the entire U.S. economy. The CBO projected the tax cut would add $1.84 trillion to the national debt over the next decade, eventually growing to 152 percent of the gross domestic product.

Creating structural debt like this gives the wealthy and powerful ultimate social control.

Whether it be student debt, debt incurred by "developing nations" or the debt that Trump and company have loaded on the American people, it shackles our dreams and indentures our children and their children.

Serving it turns us, the laboring 99 percent, into slaves building a pyramid that serves only those at the top. When that architecture crumbles we are lost in the rubble.

Remember 2008?