In this episode, Scott Becker highlights a stock market boost following the House’s approval of Trump’s tax bill, while warning of persistent high interest rates, rising inflation, and the long-term dangers of continued deficit spending.
Chapter 1: What good news does Scott share about the stock market?
This is Scott Becker with the Becker Private Equity and Business Podcast. And today's news is good news and bad news. The good news is that the stock market is pointing up again after the House approves Trump's tax bill. So that's good news.
Chapter 2: What is the bad news regarding interest rates and inflation?
The bad news is that interest rates aren't going down anytime soon and that we're also likely to end up with more and more inflation over time as deficits continue to go up. So there's good news. Good news is the stock market continues to go up.
Chapter 3: How does deficit spending affect the economy?
The bad news is for all the things that we criticized the artificial economy under Biden, the concept that the stock market was artificially inflated because of the amount of debt financing and deficit spending, well, it looks like that's not changing anytime soon. So if I call it an artificial economy under President Biden, I think President Trump has probably said that as well.
And what I mean by that is whenever you're running deficits 6% to 8% of the size of the economy, that means you better get some growth out of that. And if you're only getting half of that growth, then you're doing a very bad job in doing that deficit spending. And it seems like we are pacing to do the same thing under President Trump, which is deficit spending, which really doesn't
get us to a true economy because we're putting it on the backs of ourselves and our children and our grandchildren, it's sooner or later that debt catches up to us. We're already seeing a spot where the market prognosticators say interest rates are going to stay high for a long, long time because you can't, in a real debt market,
If a company becomes a little bit less stable in paying their debt, the costs, the interest rates go up. And that's what we're starting to see as interest rates here explode. In fact, Moody's recently downgraded the U.S. 's credit rating. Never a good sign for what was the most stable nation in the world. Thank you for listening to the Becker Private Equity Business Podcast.
Thank you very, very much.
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