source: Huffington Post Quebec
translation: doxa-louise
The midterm elections are coming: what you need
to know and why they are important
On November 6, Americans will be going to the polls for midterm elections that
might allow Democrats to regain control of the Congress to the detriment of
Donald Trump and Republicans. Here is what you need to know.
GETTING CLEAR
MIDTERM ELECTIONS IN THE US
ON NOVEMBER 6, AMERICANS WILL BE VOTING IN THE MIDTERM
ELECTIONS.
SO WHAT ARE MIDTERM ELECTIONS AND WHY ARE THESE SO
IMPORTANT?
MIDTERM ELECTIONS HAVE TO DO WITH THE AMERICAN CONGRESS.
AND NOT THE PRESIDENCY.
EVERY TWO YEARS, AMERICANS VOTE.
TO REELECT THE ENTIRE HOUSE OF REPRESENTATIVES.
AND 1/3 OF THE SENATE. GIVEN THAT SENATORS ARE ELECTED
FOR 6 YEARS.
THESE ELECTIONS HAPPEN EITHER SIMULTANEOUSLY WITH THE
PRESIDENTIAL ONE, OR ... IN MIDTERM.
BOTH HOUSES ARE CURRENTLY CONTROLLED BY REPUBLICANS.
BUT THE MIDTERM NOVEMBER 6 ELECTION COULD CHANGE THAT.
DEMOCRATS EXPECT TO RETAKE THE HOUSE OF REPRESENTATIVES.
THEY WOULD NEED TO ADD 25 SEATS TO THEIR CURRENT COUNT
TO GET A MAJORITY.
COMMENTATORS AGREE THAT THIS IS A REAL POSSIBILITY FOR
THE PARTY OF EX-PRESIDENT BARACK OBAMA.
ALTHOUGH IT WOULD BE MORE DIFFICULT TO TURN THE SENATE
DEMOCRATIC.
REPUBLICANS CURRENTLY CONTROL 51 OF THE 100 SEATS IN
THE SENATE.
AND 23 OF THE 33 SEATS UP FOR ELECTION THIS NOVEMBER 6 ARE
ALREADY DEMOCRATIC.
THYE MUST HOPE TO RETAIN THEIR SEATS AND TAKE AT LEAST TWO
MORE FROM THEIR ADVERSARIES (8 REPUBLICAN AND 2 INDEPENDENT).
TWO DEMOCRATIC VICTORIES WOULD SERIOUSLY COMPLICATE
LIFE FOR THE TRUMP PRESIDENCY.
EACH OF THE TWO HOUSES OF CONGRESS POSSESSES IMPORTANT
POWERS WITH IMPACT ON POLITICAL DECISIONS.
WITHOUT THE BACKING OF CONGRESS, THE AMERICAN PRESIDENCY
HAS A MUCH REDUCED SPHERE OF POWER.
TO BE ADOPTED, ANY NEW LAW MUST OBTAIN THE APPROVAL OF
BOTH HOUSES.
THE SENATE HAS AS WELL RESPONSIBILITY FOR APPROVING
TREATIES AND CONFIRMING CERTAIN PRESIDENTIAL NOMINATIONS.
INCLUDING THE VERY IMPORTANT ONE OF JUDGE TO THE SUPREME
COURT.
MOREOVER THE HOUSE OF REPRESENTATIVES CAN ORDER THE
OPENING OF INQUIRIES...
AND EVEN SET IN MOTION THE PROCESS TO IMPEACH A PRESIDENT.
* * *
source: Huffington Post Quebec
author: Virginie Montet, Agence France-Presse
translation: doxa-louise
The United States are maxing out on debt
While the economy is doing great
The steaming-hot economic growth which is the pride of Donald Trump
does have a cost: the level of borrowing of the federal state to finance
itself has not been this high since the recession.
The U.S. Department of the Treasury announced this week a record
volume of debt emission for the last trimester of 2018: 425 billion dollars.
This makes for a total of 1 338 billion dollars of funds which will be borrowed
in one year, the highest since 2010.
Economic orthodoxy orders one to pay back debt when the economy is
doing well - for the US it is running at full steam -, but the Trump administration
is borrowing as much as that of Barack Obama when it was a matter of pulling
the country out of the worse recession since the 30s.
The president has reduced taxes drastically in particular for business and
upped spending (mostly for defense) which worsens the budgetary deficit.
The latter has gone up by 17% for the fiscal year ending in September at
779 billion dollars. It will be in the 1 000 billion neighborhood next year.
The total amount of debt for the State is thus that of the Gross National Product
for the number 1 world economy, at more than 20 000 billion dollars.
At a meeting Wednesday of the Consultative committee on borrowing, the
Treasury explained that although income from income tax had gone up for
the Department because of economic growth, these gains had been ‘largely
wiped out by a fall in receipts from business’.
Taxes from business collected by the State went from 297 billion dollars in
2017 to 205 billion in 2018 (-31%). In this same interval, total budgetary
expenses went up by 5% to 4 198 billion dollars.
An aging population pushing up expenses for retirement and health, a hike of
investment in defense (+36 billion) and also repeated natural catastrophes
(18 billion in aid) explain this swelling up of expenses.
More expensive interest charges
But the largest extra outlay is caused by the debt itself and heightening of
interest charges. Because of higher yields on Treasury Bonds, the State had to
find an extra 83 billion to keep up with servicing the debt.
This makes understandable the ire expressed by President Trump who heaps
reproaches to the Central Bank for its rate hikes which make all borrowing more
expensive, that of consumers who are also voters at the important November 6
legislative election, as well as the State.
The Fed which upped the cost of money by a quarter point percentage (.25%)
three times this year and six since the election of Donald Trump, is expected to do
it again in December. Further it is in a phase of reduction in its holdings in Treasury
bonds, which also pushes up rates.
To aid with economic recovery after the slump of 2008, the Central Bank bought
a massive amount of Treasury bonds and shares on real estate, as way to inject
liquidity into the financial system and kick-start investment and loans.
Currently though, it is doing the reverse to lighten its load and has reached the
high point in this procedure by no longer reinvesting in some 50 billion dollars
worth of paper per month ( including 30 billion in Treasury Bonds).
worth of paper per month ( including 30 billion in Treasury Bonds).
In order to meet its needs in a costlier environment, the American Administration
in this trimester will be relying more on short-term bonds (2, 3 and 5 years) but most o
of all on a new type of bond indexed for inflation (5 year TIPS), an offer meant to lure
investors at a moment when inflation might be coming back.
In a country profoundly divided on social questions such as immigration at the
eve of important legislative elections, worries about indebtedness of the United States
don’t seem to be much of an issue.
Still a large majority of voters (74% of Democrats and 77% of Republicans), according
to a poll by the Peter Peterson Institute, believe that solving the swelling of the debt
should be a priority for government.
The Republican party, eulogist for economic orthodoxy during the Obama
Administration, has softened its approach with Donald Trump in the White House
and is considering cutting social programs to reduce expenses in the future.
The Trump Administration for its part continues to affirm that lower taxes will
eventually finance themselves.
‘If we can to reach in a sustainable manner growth greater than 3%, we will
generate an additional 1 000 billion dollars in revenue’, has recently proclaimed
Treasury Secretary Steven Mnuchin.
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