Debt, Deficits, Cassandra!
Debt and deficits. Everywhere I look, read, listen, observe, or encounter in person or by text or by email, there are wannabe Cassandras predicting a calamity over debt and the deficit.
February 11, 2025
David Kotok offers insights and analysis on current economic and political issues and their potential impact on global financial markets. David’s articles and financial market commentaries have appeared in The New York Times, The Wall Street Journal, Barron’s, and other publications. He is a frequent contributor to Bloomberg TV, and Bloomberg Radio, Fox Business, and other media.
Debt and deficits. Everywhere I look, read, listen, observe, or encounter in person or by text or by email, there are wannabe Cassandras predicting a calamity over debt and the deficit.
We thank readers for their feedback on the January 26 Sunday Kotok Report, “Trump 2.0 and Healthcare?” (https://kotokreport.com/trump-2-0-healthcare/).
And, yes, the book — The Fed and the Flu: Parsing Pandemic Economic Shocks — is finished and will be released on February 12. Details regarding preorders are updated at https://www.thefedandtheflu.com. Two recent reviews are out, at Kirkus Reviews and Readers’ Favorite.
“The only certainty in (fiscal, trade and monetary) policy, politics, in our capital markets, in our social lives and, even in sports, is the lack of certainty these days.” — Doug Kass
Trump 2.0 tariffs and our trading partners’ retaliations are taking shape. What can we expect? Today I offer my own macro perspective and some thoughts from others.
I wrote about America’s national defense on the Sunday before Trump 2.0 Inauguration Day (https://kotokreport.com/national-defense/). Many thanks to readers for their varied viewpoints and responses. Here are some additional observations.
In the US stock market, the healthcare sector is represented by the sector spider XLV. Here’s a recent pre-inauguration picture of the sector spider’s performance.
Readers, please note that this is my opinion alone.
I’m writing this in the midst of a continuously changing environment for the defense of the United States as the Biden regime transitions to the Trump 2.0 administration. Trump’s rhetoric (I hope that’s all it is) about military action in Panama or acquiring Greenland or intensifying tariff wars with our closest trading partners, Canada and Mexico, are happening in a globally diverse and rapidly changing world.
The California fires will end up setting records in billions in a catastrophe loss. On the East Coast a similar new record cost will continue to be revealed as the trifecta hurricane damages from Debby, Helene, and Milton continue to mount.
On the auspicious date of Friday the 13th of December 2024, I published “4 Stock Market Perspectives”. Readers are thanked for their comments. Today, let’s add to that discussion.
Let’s start the new year with an update and a math correction. But first, please remember that this commentary is released for a Sunday publication date on the Thursday before the Friday start of the new 119th House organization for the new Congress.
I wish all readers a healthy and happy new year. Let’s get to a very specific item that may impact every one of us in 2025.
President-elect Trump has proposed former New York congressman Lee Zeldin to head the Environmental Protection Agency (EPA).
First, I want to wish all readers the very best and safest holiday celebrations. Our Congress celebrated, too, by giving the United States an added cost of about $50 billion a year in the nation’s interest rate burden.