Trump budget plan could add $6tn to public debt in a decade, analysts say

Trump’s budget plans could add $6tn to a public debt that is already expanding rapidly, analysts say. Photograph: Bloomberg/Bloomberg via Getty Images

Trump’s budget plans could add $6tn to a public debt that is already expanding rapidly, analysts say. Photograph: Bloomberg/Bloomberg via Getty Images

Donald Trump’s tax-cutting and spending plans could add another $6tn to the US public debt over the next 10 years, independent budget analysts have calculated, as the Congressional Budget Office warned the US’s current spending plans alone could trigger a financial crisis.

The CBO released its latest assessment of the US budget and economic outlook on Tuesday. The CBO reported that Trump would inherit a $559bn deficit for 2017 and still-sluggish economy that will, on its current course, add another $10tn to the public debt over the next decade.

The CBO report projects that the US’s gross debt will grow from almost $20tn to $30tn by the end of 2027. Debt held by the public is expected to grow from about $14tn to almost $25tn. The major drivers for the debt are the growing cost of looking after the US’s ageing population and expected rises in interest rates.

“This is not a problem of runaway defense spending or runaway welfare programmes. It’s a problem of the rising cost of major entitlements that mainly go to the elderly and rising interest rates which are returning to more normal levels,” said Goldwein.

Unless something changes, within three decades the debt will double when measured against the size of the economy’s gross domestic product (GDP), the broadest measure of a nation’s economic health, reaching a level never seen in US history, the CBO said.

“Three decades from now, for instance, debt held by the public is projected to be nearly twice as high, relative to GDP, as it is this year – and a higher percentage than any previously recorded,” the CBO reported. “Such high and rising debt would have serious negative consequences for the budget and the nation.”

A debt of that size would lead to lower productivity and wages, and hamper lawmakers’ ability to use tax and spending policies to respond to unexpected challenges.

“The likelihood of a fiscal crisis in the United States would increase. There would be a greater risk that investors would become unwilling to finance the government’s borrowing unless they were compensated with very high interest rates; if that happened, interest rates on federal debt would rise suddenly and sharply,” the CBO warned.

Read the complete article on The Guardian newspaper web site here.

Roast potatoes and toast that’s a bit too brown may cause cancer, say authorities

Eating a lot of toast that’s a bit too brown could increase the risk of developing cancer, says the Food Standards Agency. Photograph: Rex/Shutterstock

Eating a lot of toast that’s a bit too brown could increase the risk of developing cancer, says the Food Standards Agency. Photograph: Rex/Shutterstock

Eating potato chips, well-browned roast potatoes and toast that is more than lightly grilled can increase the risk of cancer, according to a public health campaign urging people to change their eating and cooking habits.

The Food Standards Agency (FSA) in the UK says people are consuming too much acrylamide, a chemical produced naturally as a result of cooking starchy foods at high temperatures.

Acrylamide has been shown to cause cancer in animals and while it has not been conclusively produced to have the same effect in humans, the scientific consensus is that it is likely to do so.

The FSA insists that it does not want to scare anyone and would not describe the risk as significant but nevertheless said it is one that most people can readily reduce.

“We’re not saying avoid particular foods or groups of foods but vary your diet so you smooth out your risk. We are not saying to people to worry about the occasional piece of food or meal that’s overcooked. This is about managing risk across your lifetime.”

The warning relates to foods that are high in starch, with potatoes, including sweet potatoes, the biggest staple affected. But it also covers other root vegetables, crackers, cereals, including cereal-based baby food, bread, biscuits and coffee. There is no safe threshold defined in humans but the FSA says research suggests people in all age groups are eating more than its experts are comfortable with and are unaware of the risks.

Cath Mulholland, a senior adviser at the FSA, said: “If you’re living on crisps (potato chips), burnt toast, whatever, that’s going to be more risky than a healthy diet. It’s not a high level of risk but it’s higher than is comfortable.”

People are also being advised to eat a varied diet, carefully follow cooking instructions and not to keep raw potatoes in the fridge if they intend to roast or fry them as this can increase acrylamide levels. Instead, raw potatoes should be stored in a dark, cool temperature above 6C.

The potentially carcinogenic nature of acrylamide in food was first highlighted by a Swedish study in 2002. It differs from warnings relating to barbecuing meat, which are concerned with another substance called benzopyrene.

You may read the complete article on The Guardian here.

 

 

 

Trump inauguration crowd: Fake News

White House press secretary Sean Spicer’s angry declaration that the media faked low attendance does not stack up against photos, videos and public transport figures.

Crowds on the National Mall just before Donald Trump’s inauguration in 2017 (left) and Barack Obama’s in 2009. Photograph: Reuters

Crowds on the National Mall just before Donald Trump’s inauguration in 2017 (left) and Barack Obama’s in 2009. Photograph: Reuters

Sean Spicer’s angry insistence that Donald Trump drew “the largest audience ever to witness an inauguration, period, both in person and around the globe” is just the beginning of fake news and post-truths about to spout forth from the White House.

In his blistering debut as White House press secretary on Saturday, Spicer accused journalists of reporting inaccurate crowd numbers and using misrepresentative photographs “to minimise the enormous support” that he claimed the new president enjoyed at his swearing-in.

“No one had numbers because the National Park Service, which controls the National Mall, does not put any out,” he said, before going ahead anyway to declare that Trump had attracted “the largest audience ever to witness an inauguration” in person and in the world.

“These attempts to lessen the enthusiasm for the inauguration are shameful and wrong.”

Crowd estimates can be fraught with difficulty and there is indeed no official figure. But images of the National Mall on Friday contradicted Spicer’s assertions – particularly when compared with pictures from Barack Obama’s inauguration in 2009 and the turnout for the Women’s March on Saturday.

A timelapse video produced by PBS indicates that the National Mall was never full at any stage on Friday:

According to figures shared by the Metro Washington subway system on Twitter, 193,000 trips had been taken by 11am on Donald Trump’s inauguration day, compared with 513,000 during the same period on 20 January 2009 when Barack Obama took office.

“Ridership” as of 11am on Saturday stood at 275,000: more than eight times a normal Saturday and “even busier than most weekdays”, the Metro tweeted.

It is worth noting that Trump drew just 4.1% of the vote in Washington DC and lost the surrounding states of Maryland and Virginia.

His inauguration also occurred on a Friday – a fact that does not go any way towards mitigating the comparisons with Obama’s 2009 inauguration, which fell on a Tuesday, but does contextualise the strong turnout for the Women’s March on Saturday.

Before Spicer’s briefing room tirade on Saturday, Trump had told an audience at CIA headquarters that he had given his inauguration address to a “massive field of people … packed”, he estimated, with between 1m and 1.5m people.

To his eye, Trump said, the crowd stretched “the 20-block area, all the way back to the Washington Monument” – but a television network he didn’t name had broadcast a shot of “an empty field” and put the crowd at 250,000.

He went on to say that God had stopped rain from falling during his speech, before adding that he had “caught” the news network in a lie: “We caught them in a beauty.

“And I think they’re going to pay a big price.”

But the evidence certainly seems to challenge Trump’s assertion that he had drawn a crowd of as many as 1.5m people.

 

Fact-checking the inaugural speech: the economy, crime, and hiring American

 Donald Trump waves after his inaugural address. Photograph: Saul Loeb/AP

Donald Trump waves after his inaugural address. Photograph: Saul Loeb/AP

In his first presidential speech, Donald Trump painted a bleak picture on issues ranging from education to the military. Alan Yuhas sorts fact from fiction.

“For too long a small group in our nation’s capital has reaped the rewards of government … Washington flourished but the people did not share in its wealth.”

This is technically true – the Washington DC area has seen more than a decade of growth – but more complicated as a rhetorical attack on Washington as a symbol of “the establishment”.

The chasm of American inequality has a long history with origins spread around the country. Since 2000, the wealthiest 10% Americans have “reaped” the vast majority of the economy’s rewards. Many of those richest Americans are concentrated on the coasts, but most Americans, regardless of their geography or politics, only saw their income increase in 2015, after years of stagnation. That said, the middle class has been diminishing for years, according to a 2015 Pew study, as the population has shifted more into two other categories: upper income and lower.

The actual geography is uneven: some research shows that the most unequal states in 2010 were California and New York, and that states like North Dakota and Montana saw booms and busts alongside the gas industry.

Trump has a more literal point, too – the average member of Congress is far wealthier than the average American – but the leaders of Washington DC are hardly uniform in their attitude toward inequality. For instance, Trump’s cabinet (if his nominees are all confirmed) is set to be the wealthiest in history and will include a former banker who profited immensely on foreclosing homes during the 2008 financial crisis, a billionaire called a “vulture” investor because of his history of picking apart businesses, and two other advisers, Steven Bannon and Gary Cohn, who are former Goldman Sachs executives.

“Politicians prospered but the jobs left and the factories closed.”

American manufacturing has been in decline for decades for a host of reasons. During the campaign, Trump liked to blame free trade deals such as Nafta, but outsourced jobs are only part of the equation. In 2015, the Congressional Research Service wrote: “Nafta did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters.”

The deal’s net effect “appears to have been relatively modest”, the researchers concluded. Three years earlier, the OECD found that manufacturing jobs fled the US after the deal was signed but also noted the broader shift toward a service economy. Meanwhile, China has become the world’s largest manufacturer by dint of its beneficial trade status, its human and material resources, its lax and dangerous labor laws, and the steroidal advance of automation, which continues to destroy and create jobs in the US as well. Politicians played a part in all of this, but over multiple generations.

“An education system flushed with cash but which leaves our young and beautiful students deprived of all knowledge.”

The US education system, like its economy, is riven by gigantic inequities that vary by state. In 2015-16, public school teachers around the US earned, on average, between $42,025 and $77,957, according to the National Education Association, which would make them squarely in the middle class or on its edges, depending on where they live. Teachers are paid best in New York, Washington DC, and Massachusetts, and paid least in South Dakota, Mississippi, and Idaho.

School districts, on the other hand, differ greatly from each other, and experts have spent decades debating the best ways to shape education. Trump’s pick for education secretary, Betsy DeVos, has no experience in the public school system and instead has, in her home state of Michigan, campaigned to move students into private charter schools and into voucher programs. Charter schools have spread across Michigan, but the state’s academic performance has slid behind that of other states, and charter schools she has championed are now much derided.

“The crime and the gangs and the drugs.”

Trump is conjuring up a vision of America as a wasteland that does not square with reality. The nationwide crime rate remains low, about half what it was in 1991, despite a 4% increase in violent crime in 2015. That single-year increase was largely due to major increases in a few cities – namely Baltimore, Washington DC and Chicago – even as the US’s largest cities, including New York and Los Angeles, held crime to historic lows. Murders of black men and murders by firearms accounted for most of the increase.

During his campaign, Trump often falsely lumped “gangs” in with undocumented migrants; there is no evidence to suggest that immigrants are more likely to commit crimes than US-born citizens, and undocumented migration has not increased for about five years. Trump is correct that the US has a drug problem: a surgeon general’s report last year found that one in seven people in the US will likely develop a substance-abuse problem, and only one in 10 will receive treatment. Trump has talked about wanting to treat addiction as a health problem, but his pick for attorney general, Jeff Sessions, has a record of supporting criminalization in line with the “war on drugs”.

“For many decades, we’ve enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military. We defended other nations’ borders while refusing to defend our own.”

Trump is right that corporations, foreign and domestic, have profited enormously in the last decade. He is less correct about national security.

The US has budgeted $4.5bn for border security in 2017, an increase from 2016 and in line with Barack Obama’s general expansion of the Border Patrol and homeland security spending.

After the so-called sequestration cuts of 2013, a result of a fight between the White House and Congress over taxes, the Pentagon was forced to reduce its budget by 7.7%. The defense department’s leaders have rejected the idea that the military is “depleted”, however, and the Obama administration has worked to replace aging equipment and develop new weapons.

“And spent trillions and trillions of dollars overseas while America’s infrastructure has fallen into disrepair and decay.”

A 2013 study estimated that the US wars in Iraq and Afghanistan have cost Americans between $4tn and $6tn. Foreign aid, on the other hand, costs on average about $31-$40bn a year, or about 1% of the total US federal budget of $3.5tn. The proposed 2017 budget for foreign aid is $50.1bn.

“We will follow two simple rules – buy American and hire American.”

Trump has yet to follow his own rule: his Mar-a-Lago club in south Florida has continued to hire foreign workers even after he won the White House.

More on this at The Guardian web site.

How to Trump-proof your life (in a minute) – video

From The Guardian web site a short video on how to Trump-proof your life….

View this article on The Guardian and other articles here.

Trump’s treasury secretary pick- nickname “foreclosure king” – failed to disclose nearly $100m in assets

Steven Mnuchin, the hedge fund millionaire Donald Trump has picked to run the US treasury, failed to disclose nearly $100m in assets to Congress, including his role as a director of offshore funds and close to $1m in art owned by his children.

On Wednesday night the committee learned Mnuchin had initially failed to disclose he was a director of Dune Capital International, an investment fund incorporated in the Cayman Islands, a tax haven. He also omitted other assets, including $95m in real estate and $906,556 worth of artwork held by his children. (See ‘It’s elder financial abuse’ further down the page.)

“Mr. Mnuchin has claimed these omissions were due to a misunderstanding of the questionnaire – he does not consider these assets to be ‘investment assets’ and thus did not disclose them, even though the committee directs the nominee to list all real estate assets,” according to documents filed with the committee.

Mnuchin was questioned by the Democratic senator Bob Menendez who asked how he had failed to disclose the assets when he signed a statement listing his holdings on 19 December.

“I have a ton of other questions on policy but first and foremost is truth and veracity, what Americans need in their treasury secretary” said Menedez. “In essence isn’t it true that what you did here is take these companies, put them offshore so you could help your clients, who you were making money from, to avoid US taxation.”

Mnuchin said that was “not true at all”.

“I assure you that these forms were very complicated,” he said. “When I certified those forms I thought it was correct.” Mnuchin said he may have erred in giving the forms in early and should have waited and that his lawyer had assured him he had filled the forms in correctly.

“It doesn’t take a rocket scientist to understand ‘list all entities’,” said Menendez.

Steve Mnuchin was once CEO of OneWest bank, which has been accused of lending dubious mortgages to the elderly and evicting thousands in the state of California.

Lights flashing, three police cars showed up to Bill Montes-Pack’s quiet suburban street on the morning of 15 December 2015. The Benicia, California, man had stayed up all night waiting for the sheriff’s office to evict him from the house his grandparents had owned since 1971.

“It was really, really traumatic,” Montes-Pack recalled one year later. Standing outside the locked front door, the 49-year-old peered into the empty living room that holds his earliest Christmas memories and surveyed the overgrown ivy damaging the house’s facade.

The foreclosure – which he said was based on a predatory loan and improper paperwork – originated with lender OneWest Bank, at the time run by chairman and CEO Steven Mnuchin. The veteran Wall Street financier’s foreclosure practices are receiving fresh scrutiny this week after president-elect Donald Trump announced him as the nominee for US Treasury secretary.

“Rather than shaking up Wall Street, he installs the very person that was part of the financial mess,” said Montes-Pack, who has effectively been homeless since the foreclosure. “I’m just thoroughly disgusted.”

‘It’s elder financial abuse’

Mnuchin, who is also a Hollywood movie producer, earned the nickname “foreclosure king” after he purchased distressed mortgages during the financial crisis and evicted thousands of homeowners.

The former Goldman Sachs banker, worth an estimated $40m, has no government experience, and critics worry that, as Treasury secretary, his policies could benefit the wealthiest people and roll back critical bank regulations.

One controversial source of OneWest foreclosures is the corporation’s reverse mortgages, which are loans to elderly homeowners that enable them to borrow against their home equity. These types of mortgages have been aggressively marketed to seniors as a way to help them stay in their homes, but some don’t understand the risks and can’t afford associated fees.

In 2006, Montes-Pack’s grandparents bought a reverse mortgage from IndyMac Bank, the predecessor to OneWest, which he said took advantage of his grandfather, who suffered from dementia.

After his grandparents died in 2012, Montes-Pack moved in, but the corporation – by then OneWest and run by Mnuchin – quickly began foreclosure proceedings.

The bank’s case, he said, relied on a document signed with the name “Bryan Bly”, who has been widely reported in numerous investigations as a so-called “robo-signer”. Robo-signers are individuals whose signatures are wrongfully used to automatically authenticate thousands of mortgage documents that they haven’t read and are in some cases falsely notarized.

The document, which an auditor determined was improper, makes his foreclosure illegitimate, Montes-Pack said, adding: “It’s elder financial abuse.”

His family is still fighting the foreclosure, but in the meantime Montes-Pack’s mother has been forced to live in a nursing home.

Read complete article on The Guardian web site.

Read the article about elder abuse and evictions by OneWest and run by Mnuchin.

Why presidents take an oath of office

georgewashingtonswearingoath

AT NOON on January 20th, Donald Trump will take the presidential oath of office, administered by John Roberts, the chief justice. With his right hand raised and his left hand atop two bibles, Mr Trump will say “I do solemnly swear”, (though he also has the option to “affirm”, using a book of his choice), “that I will faithfully execute the office of president of the United States, and will to the best of my ability, preserve, protect and defend the constitution of the United States.”

There are signs that Mr Trump’s constitutional commitment may not match those of his predecessors in the White House. During the campaign and the post-election transition, Mr Trump made several statements that seem difficult to square with America’s founding document. In an apparent rejection of settled First-Amendment law—and of a ruling by the late Antonin Scalia, a justice he hails—Mr Trump said that people who burn the American flag should be jailed or lose their citizenship. He also called for looser libel laws to permit newspapers to be sued more easily and advocated the use of torture, long held to violate the Eighth Amendment. Some scholars say that the oath gives presidents a tool to protect the prerogatives of their office from the encroachment of Congress. But others argue the presidential oath was designed to serve as a check on chief executives’ power. David Strauss, a law professor at the University of Chicago, observes that oaths are inherently “limiting, not empowering”.

From The Economist magazine here.