Burning Down the House

Congress could easily end the shutdown by coming to an agreement on healthcare subsidies. Other disputes could be readily resolved in the familiar way — in which both sides agree to spend more money.

Friday, October 24th, 2025

Bill Bonner, from Baltimore, Maryland

“Oh, you’re surprised Jeff Epstein committed suicide? Imagine how surprised Jeff must have been.”

Gosh…what is in those Epstein Files? Enough to change the US system of government? Maybe.

There are three branches of the ‘tri-partite’ government. Executive, Legislative. Judicial. Congress makes the laws. The administration executes the laws. And the courts resolve controversies. The idea is that they work together, one challenging and limiting the other. That is the system of checks and balances that is meant to protect ‘our democracy.’

Future generations of historians will no doubt marvel at how easily and quickly the three-part system was tossed overboard. Already, many important pieces of it are in the water — the ‘war power’…the budget power…trade policy…and much more. Laws are still written, but at the President’s request. “Laws” are still written, but at the president’s request. And now, Trump’s man in Congress, Mike Johnson, has simply closed down the House.

This is not at all the same thing as the ‘shutdown’ of the federal government we’ve been hearing about. The feds have shut down executive functions, not legislative functions. But Mr. Johnson has closed the House too. Why?

You would think that representatives would have something to talk about. Fortune:

The U.S. national debt has surged past $38 trillion, according to the U.S. Treasury Department, just two months after surpassing previous forecasts to reach $37 trillion in August. This means the federal debt rose by $1 trillion in a little over two months, which the Peter G. Peterson Foundation calculates is the fastest rate of growth outside the pandemic. Michael A. Peterson, CEO of the nonpartisan watchdog dedicated to fiscal sustainability, said this landmark is “the latest troubling sign that lawmakers are not meeting their basic fiscal duties.” In a statement provided to Fortune, Peterson said that “if it seems like we are adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000.”

Peterson emphasized that the costs of carrying this debt are mounting rapidly. Interest payments on the national debt now total roughly $1 trillion per year, the fastest-growing category in the federal budget. Over the last decade, the government spent $4 trillion on interest, and Peterson calculated that it will balloon to $14 trillion over the next 10 years. He said that money “crowds out important public and private investments in our future.”

But the House — meant to be where the peoples’ representatives solve this kind of problem — is as silent as a tomb. No hearings. No investigative reports. No committee meetings.

Of course, the House will re-open soon, right? After all, it has work to do. But what if it never really opens again?

According to internet scuttlebutt, one of the reasons for the closure may be that POTUS and other powerful figures do not want to see their names in the Epstein files. And if the House reconvenes, Speaker Johnson will be forced to seat the newly-elected Adelita Grijalva, who has said she would provide the final vote necessary to bring the files to light.

It seems unbelievable that the House could be put out of business over a single vote on a non-essential subject, but would anyone miss it? Maybe not.

Congress could easily end the shutdown by coming to an agreement on healthcare subsidies. Other disputes, too, could be readily resolved in the familiar way — in which both sides agree to spend more money.

But how do you compromise on the Epstein files? The Biden administration didn’t want to release them. And now, neither does the Trump team. They promised to do so, but then Biden Administration didn’t want to release them. And now, neither does the Trump team. They promised to do so…but then they insisted that they never had any files. It was a ‘hoax,’ said POTUS. And there was nothing to see in them, anyway.

That is possibly true. But Bill Clinton reportedly visited Epstein’s island 28 times. What were they talking about? And Trump was supposed to have been Epstein’s “closest friend” for ten years, according to audiotapes recorded by journalist Michael Wolf and reported by Salon. Maybe those files would be devastating, not just to a few high-profile men…but also to the tight relationship between the US and Israeli intelligence.

Which leads us to wonder if the House will ever re-open as long as the threat of complete release of the Epstein files remains a risk.

After less than a year of the second Trump term Americans have gotten used to being governed by the Big Man. Hardly a day goes by that he fails to announce a fresh policy — never discussed or approved by Congress. Trump does this, says one headline. Trump does that, says another. There appears to be no limit to what POTUS can do.

So why do we need a House of Representatives? In Germany, the Reichstag was burned in 1933. In the US, will the House be simply cancelled?

And how hard would it be to shift legislative power to the Big Man? All Mike Johnson has to do is play dead. If he doesn’t re-open the House soon, Trump may be forced to assume emergency powers. And who could blame him?

Stay tuned.

Regards,

Bill Bonner

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Source: Bureau of Labor Statistics

Research Note, by Dan Denning

Both key measures of inflation—headline CPI and core CPI (which excludes food and energy) rose 3% over the last twelve months ending in September. Three percent is 50% higher than two per cent, which is Fed’s official (and completely made up) inflation target. Stock futures rallied this morning on the ‘tame’ CPI report in expectation that the Federal Open Market Committee will cut rates when it meets next week (October 28th-29th).

If inflation is running 50% higher than the Fed’s target, how can the September BLS report be ‘tame’? Because Wall Street analysts expected a higher figure. Inflation expectations are apparently more important than actual inflation figures (assuming those figures are real). And it’s true that how people feel about inflation, their expectations, does matter. When inflation expectations become ‘anchored’ at a higher level, you get a permanent shift higher in the price level.

But higher prices may happen regardless of people’s feelings. Ominously, the uptick in the headline figure was driven by a 1.5% increase in energy prices. THAT was driven by a 4.1% increase in gas prices. Lower energy prices (especially oil) have kept the headline figure from climbing even higher this year. That may change soon, as I’ll show paid readers later today when I look at the oil price and the performance of our Trade of the Decade

Final note. The BLS report was directed to issue the CPI report by the White House despite the government shutdown. Why? The September CPI report is used as the basis to determine cost of living adjustments (COLA) to Social Security benefits. Based on today’s figure, the COLA adjustment will be…2.8%, compared to 2.5% last year.

The government is lying to you about inflation. And the COLA for Social Security benefits is lower than the official rate of inflation, which itself is likely wrong. There are around 72 million people (mostly Americans) that receive Social Security benefits. The average retiree’s benefits will rise from $1,920/month to $1,974/month—an extra $54/month (or $648/year) to cover the rising cost of living in America for those on a fixed income.