Captain Confusion

At the current rate, total debt will bound over $40 trillion before the end of Trump’s third year. At today’s 10-year bond yield, that would mean a financing charge of around $1.6 trillion.

Wednesday, March 26^th, 2025

Bill Bonner, writing from Baltimore, Maryland

The first 100 days of a new administration are said to be the most important. That is when the new team has the most momentum and enjoys most support. People expect change…and want to see what happens.

So, with more than two-thirds of Trump’s first hundred days already digested, it might not be too early to guess about how the entire meal is likely to go down.

What we noticed in his first time in the kitchen was that the basic menu didn’t change much. Everything when he left was about the same as when he arrived — only worse. The swamp was deeper. The debt was higher. The power of the federal government was greater. And the reach of politics was further. The simplest measure of the totality of it was probably the federal debt itself, which rose from $20 trillion in 2016 to $28 trillion in 2020.

This time, both supporters and enemies say Trump ‘hit the ground running’ with a flurry of executive orders. How many will withstand judicial review? How many will make any difference? What is amazing is how little ground has actually been covered.

Mr. Trump promised to end the war in the Ukraine and the killing in Gaza immediately. Both are still going on. News reports tell us that the Trump Administration is actually deporting fewer dangerous aliens than Biden did.

Sidekick Musk has made some remarkable headlines. But what good does it do to disclose waste and inefficiency if there is no real plan to do anything about them? Was not Team Trump aware that it had to work with Congress to make structural budget changes?

And where are the much-awaited audits of the Pentagon, the CIA and the Fed? Will they ever happen? Everyone knows that a serious look at the military would reveal trillions in waste; why then does the Trump Administration give the green light to spending a hundred billion more?

The most urgent issue facing the Trump Team is bringing federal spending under control. Annual deficits are rising to $2 trillion. The cost of debt service — interest payments — is already over $1 trillion. And at the current rate, total debt will bound over $40 trillion before the end of Trump’s third year. At today’s 10-year bond yield, that would mean a financing charge of around $1.6 trillion — or about twice the entire military budget.

Mr. Trump said he would balance the budget. But there is no sign of it. Nor even a discussion of it. Instead, there is much discussion of Venezuela.

Venezuela must be a sore subject for the president. What he has against the country, we don’t know. But he’s proposing a 25% tariff against anyone who dares even to trade with it.

More broadly, Mr. Trump seems eager to expand US influence…if not US territory. He wants to take back the Panama Canal…to take over Greenland…to absorb Canada as the 51st state. Even his most loyal supporters wonder ‘what’s this all about’ since the whole program seems at odds with his ‘America First’ agenda. Adding Canada to the United States, for example, would make the US a very different country.

So far, the hallmark of Trump II is confusion. Tough guy talk has been leveled at Hamas, the Houthis, college protesters, and anyone who opposes the Trump Regime. But where’s the tough guy talk against what really matters to Americans — their purchasing power? When does the president tell Congress to stop spending money it doesn’t have?

And when do we find out what’s in the still-classified Jeffrey Epstein documents?

Captain Confusion fires volleys to the left…volleys to the right…and volleys in front of him. What are his real strategic objectives? It would be nice to know. And to see an actual plan for achieving it.

DOGE has saved billions…millions…or maybe nothing at all. Where’s that $5,000 DOGE dividend check? Thousands of useless federal employees have been fired. Wait… they are being re-hired. The Republicans are cutting hundreds of billions out of domestic spending budgets… but spending is still going up.

In the absence of any visible, coherent program…observers are trying to insinuate one. Some say the smoke is to hide a Mar-a-Lago Accord, in which the debt is erased and a new currency introduced. Some say the tariffs are just mirrors…to put the rest of the world off balance.

The confusion, they say, will allow us to sell more debt at low interest rates…or maybe just flood the world with dollars. Or maybe the real goal is to set off a real trade war and a depression, knowing that the chief loser will the biggest trader in the world — China.

In a world of chaos, we try to find a theory…a plan…an idea that makes sense of it. Is Mr. Trump playing ‘three-dimensional chess?’ Four-dimensional chess? Chinese checkers?

Regards,

Bill Bonner