This is part two of a three-part series of posts looking at the challenges the Democrats face. You can find part one here.
Before we get started for the day, I want to address why I haven’t written about the Jeffrey Epstein affair. I am very confident that the ‘breaking news’ jockeys are more than equipped to keep you informed up to the minute on developments. It’s not that I don’t care, because I do believe that the truth is essential. However, politically, it will not change a thing, because if Trump were brought down by it, all it means is that JD Vance will assume his intended presidential role early, and that presents a whole new level of danger I’m not sure America is ready for.
Politics is a complex and divisive subject, especially when it is no longer about vision but rather about tribal warfare. There’s a longstanding phrase in the halls of power. “It’s the economy, stupid”. If that’s the case, then the Trump administration is already a failed experiment. As I have said many times before, this administration is a fantasy reality TV series in which those with wealth profit from those in the middle and at the bottom. History will remember it as the administration that stole from the poor to give to the rich.
TACO tariff boy is back as he claims victory for a $27 billion budget surplus. In some ways, this is actually a victory for Trump, because despite his TACO approach to tariffs, he has now normalised his across-the-board 10% tariff on imports from around the world. This will inevitably increase tariff revenue each month, and that is what Trump wants his base and anyone else willing to listen to focus on. However, what you need to understand is that it is just another sleight of hand act of misdirection. For context, consider reading the reporting on the surplus, published on July 11th by CNBC. It notes:
The Treasury Department noted that the month benefited from calendar adjustments, without which the deficit would have been $70 billion.
So, what exactly are calendar adjustments? They are adjustments made by the treasury to the schedule of treasury auctions or debt management operations in response to factors such as economic forecasts or specific events. These adjustments ensure the government's borrowing and debt management activities align with market conditions and monetary policy objectives. As stated above, had these adjustments not been made in June, it would have resulted in a $70 billion deficit.
The problem is that the administration selectively chooses numbers to align with its economic narrative. Please don’t think Democrats would not do that because they absolutely would. The numbers must be examined in the context of the broader economic picture. The reporting continues to note:
Net interest on the $36 trillion national debt totalled $84 billion in June, down slightly from May but still higher than any other category with the exception of Social Security. For the year, net interest — what Treasury pays on the debt it issues minus what it earns on investments — is at $749 billion. Total interest payments are projected at $1.2 trillion for the full fiscal year.
For further context, please note that the new budget bill will add $3.3 trillion to the existing debt amount. Even after all of the above is taken into consideration, you have to be aware that the customs duties for the month are just a tax increase of $27 billion on US importers, which ultimately means a tax increase of up to $27 billion on US consumers. What happened to the Republican Party being the party of low taxes? In reality, it is an act of state theft against its citizens. To be clear, exporting countries pay NOTHING.
Trump is embarking on a choreographed dance with business bosses who are trying to assess which way to jump. For those who front-loaded on imported stock before Trump’s ‘Liberation Day’ escapade in April, they are now faced with a decision. Do they alienate customers by raising prices to adjust for tariffs, or do they eat the tariffs in the hope that Trump will relent? At the moment, it appears they have chosen the latter, which is also a reflection of the market, which is making the assumption that Trump will fold as new deadlines approach. The significant advantage for Trump of this cautious approach by big business is that it creates a compelling, yet false, economic narrative for him to sell.
As things stand, consumers are thinking, ‘We don’t know what all the fuss is about’, simply because they are currently being protected from the impact of tariffs by businesses that are trying to weigh what Trump’s next move will be. Please rest assured, this is just short-term relief. It will soon reach consumers, and that is when the actual test will take place. Add to that the way Medicaid and SNAP cuts have been scheduled not to kick in until 2027, and it enables the administration to push the narrative that Democrats are fear-mongering. All the public sees is a minimal immediate economic impact.
Where I think Trump has made a significant miscalculation is on mass deportation. Putting aside the social impact of terrorising the immigrant population for a moment, the economic cost is debilitating while only appealing to a small segment of the public. Once you empty the farming, meat packing and hospitality sectors of undocumented workers, you begin to burn money, not just in profits for businesses in this sector, but the contributions they make to the economy. As noted by the American Immigration Council:
Undocumented immigrants play a crucial role in the U.S. economy, not only through their labor but also through substantial tax contributions that support public services and government programs. In 2023, households led by undocumented immigrants paid $89.8B in total taxes. This includes:
$33.9B in state and local taxes and $55.8B in federal taxes.
In 2023, approximately 4.9% of the U.S. workforce was undocumented.
89.4% of undocumented immigrants are of working age.
Let’s assume Secretary Bessent is correct in his assessment that the US will bring in $300 billion in tariff revenue. If you balance that against the tax revenue lost from undocumented workers based on 2023 figures, the number reduces to just over $200 billion. The cost of a detention bed is around $150 per day. Let’s assume it takes a month to deport someone; that’s around $4,500 per month. If they are working to capture Stephen Miller’s target of 3000, that would mean ICE is detaining 90,000 immigrants at $150 a day, which is $13.5 million per month. Of course, this is a simplistic calculation, but it provides some indication of the fiscal burn rate. Effectively, you are shifting from a $90 billion tax revenue stream to a $162 million loss on detention accommodation alone, which excludes deportation. Bear in mind, Miller wants to deport a million in the first year, so the costs would likely be greater.
It represents a massive economic self-inflicted wound, before even considering the implications for the food supply chain and hospitality industry. To suggest that homegrown US workers can replace these skilled jobs is frankly a joke. To suggest that they could be replaced by Medicaid recipients meeting new work commitments is beyond a joke. Bill Clinton tried it and it failed miserably. On every single front, the mass deportation policy is an economic disaster. Polling already suggests that the implementation of the policy is deeply unpopular. The unrealistic quotas are resulting in American citizens being caught up in the purge, which is a public relations disaster. That’s before we consider empty supermarket shelves and inflated food costs.
The numbers don’t add up. It’s a prohibitively expensive, politically ideological purge of people who are already being exploited by often unscrupulous businesses. To be very clear, I do not support unregulated immigration, as it is neither helpful to the immigrants nor the country they seek refuge in. However, without a properly resourced and efficient asylum system, border controls become impossible. The vast majority of immigrants seeking access to the US illegally are economic migrants.
The irony is that if illegal immigrant workers make up between 4 and 5% (around 8 million) of your workforce, there is clearly a demand for their labour. As to the claim that they are ‘poisoning the blood of the nation’, they make up just 3% of the overall population. This serves to highlight that mass deportation is using a sledgehammer to crack a nut. Rest assured, though, Republicans have no intention of their made-for-TV performative acts of cruelty.
The truth is, this goes much deeper than economic impact; this is the reimagining of a society, and the administration is prepared to throw anyone opposing their march to theocratic autocracy under the bus. They don’t care that it’s costing billions of taxpayers’ money. By using tariffs, they are using the victims’ own money to victimise them. Stop and think about that for a moment. They are using YOUR money to build an internal state security and surveillance system to control the population. Believe me when I say social credit is just around the corner. Always remember, at the funfair, you sell more tickets on the ghost train than the speak your weight machine. Can I gently encourage you to consider the latter, because in this moment, the truth is your only friend.
Tomorrow, we’ll examine how Democrats must adjust their approach if they are to have any chance of winning this war, as opposed to Trump losing it and them being perceived as the lesser of two evils by voters.
Putin couldn't have found a better operative than Mr. Kraznov.
The truth is, our election data was manipulated.