Here’s Why Democrats Are Trying To The Crash Stock Markets

Several Republicans, notably Steve Bannon and Lou Dobbs, are warning that the Democrats are arranging for the stock market to collapse on the day House Republicans vote not to raise the debt ceiling. It is believed the Biden Administration will declare a temporary “default” on U.S. debt, the stock and bond markets will collapse, and Republicans will be blamed.

Lou Dobbs, a conservative commentator, has advised Republicans to vote for an increase in the debt ceiling. Bannon and Dobbs concurred that the economic collapse was imminent on Dobbs’ podcast published on March 21,  but neither knew when it would occur. Bannon predicted that it would take place before the decision on the debt ceiling. Dobbs merely contended that refusing to vote for the debt ceiling would be a grave political error that could deal the Republican Party a “fatal blow.”

According to Dobbs, the majority of budget-exceeding government expenditures have already occurred. Dobbs believes the vote on the debt ceiling discussion is too late as most of the money has been spent. The issue is authorization, and if they don’t do it, the result will be another vicious thrashing by the destructive and anti-American Marxist Democrats of the Republican Party at the very moment when they are emerging as an opposing force.

Democrats are incapable of managing the economy, but they are experts at blaming Republicans, with the conventional media serving as their press secretaries. A refusal by Republicans to raise the debt ceiling will allow the Biden administration to claim they were forced into default. The media will accuse Republicans of the subsequent stock and bond market collapse.

The Democrats did not increase the debt limit when they had the opportunity late last year. Perhaps they believed a confrontation with the Republicans would be politically advantageous. Biden intends to blame the Republicans for any impending doom, despite refusing to negotiate the matter.

But if Republicans can avoid assuming the blame for Biden’s economic collapse, they could win large in 2024 and beyond. Biden has botched U.S. domestic and foreign policy, setting the stage for a domestic and international crisis without precedent. Since 2010, Viktor Orb├ín’s Fidesz party has held a supermajority in the Hungarian parliament for various reasons, including the fact that the socialist government mismanaged the economy and government so poorly that an IMF rescue package was required.

After taking responsibility for the Great Depression, Republicans in the United States were out of power for decades. The symptoms of the impending stock market collapse are evident to Democratic Party economists. On April 14, one of President Obama’s former Treasury Secretaries, Larry Summers, argued that “Huge Volumes of Government Debt” are driving up real interest rates. In the fourth quarter of 2022, the annual interest rate paid on U.S. government debt increased from $550 billion to $853 billion, according to data published by the St. Louis Fed. Almost one out of every four dollars the federal government collects must now go toward interest payments.

Due to the massive budget shortfalls, stagnant economy (another Summers’s prediction), and high-interest rates, these huge interest payments are likely to increase even as the Fed fights to reduce inflation.

Huge Deficits

Huge budget deficits enacted by Biden when the Democrats controlled both chambers of Congress forced the U.S. government to borrow money through the sale of Treasury Bonds. In addition, the Fed cannot simply purchase these bonds and return the interest payments to the government. It is incurring a deficit as it pays banks ever-increasing interest on the reserves they deposit at the Fed.

The Transition to Renewable Energy Sources.

As part of the Green New Deal, which Democrats ironically referred to as the Inflation Reduction Act, the government will subsidize an abundance of green energy projects. They passed this costly plan even though it had failed in Germany. If they truly believed that carbon dioxide in the atmosphere was a significant problem, they would eliminate the regulations prohibiting the construction of carbon-free, reliable nuclear power facilities.

The collapse of the dollar

Summers did not mention the prospect of a dollar collapse, which would exacerbate the rise in real interest rates and the subsequent stock market fall. The BRICS nations, with China as their leader, are making a significant effort to end the dollar’s dominance as the main international currency. Any success they achieve will reduce demand for dollars and U.S. government debt, resulting in the dollar’s exchange rate collapse.

Increasing the debt ceiling with legislation is a good idea for Republicans, allowing the president discretion over what to pay the next time the United States reaches its debt limit. Thus, future presidents will no longer be able to accuse Congress of a default on U.S. bonds. Congress must also reform its budgeting process, which was established in the 1970s and has, with few exceptions, contributed to enormous deficits.

If Republicans in the House vote to increase the debt ceiling, they have an opportunity to reduce government spending when they pass a budget, appropriate funds, and authorize expenditure. In the interim, Democrats will have accepted responsibility for the inflation and stock market collapse that their irresponsible economic policies caused.

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