In October, construction started on one of President Donald Trump’s largest campaign promises: “the wall.” During the campaign, a very heated issue among the US population was the infamous wall that Donald Trump had proposed to build long the boarder of the US and Mexico in order to stop illegal immigration.
Although very controversial inside the United States, Mexicans who live on the boarder seem less than amused. There is defiantly a sense of indifference sine a new wall would not impact the lives of the resident in any significant way. “It’s not an issue for us, it’s part of the landscape.” – was one response from a resident of Tijuana, the western border city. [1]
The project is no small undertaking. It will need to span at least 1,900 miles, be 30 feet tall, and extend into the ground by at least 6 feet. The project is expected to cost anywhere between $20 billion and $70 billion with yearly maintenance costs being $150 million per year. Many designs have already been proposed including a solar panel wall that would supposedly pay for itself in five years. [2] If Donald Trump is serious about building the wall, he would easily use his real estate skills and build a profitable project that would actually return money to the coffers of the United States. It would need to cashflow, and could easily be financed through private equity. But the later of those two will probably not happen, why?
Few understand Trump’s real motivation for the wall. It is merely a politically charged infrastructure project designed to put US citizens back to work. Despite the best efforts of policy makers over the last decade, the United States job market is dead in the water. Donald Trump hopes to ease this if he can, and he will try by using old techniques. Donald Trump’s wall will be the equivalent to Franklin Roosevelt’s New Deal from the 30s. With a basis of faulty economics, stimulus spending and building large bridges-to-nowhere have been the half-baked solutions for US politicians dating back almost 90 years. The idea is to create jobs with the public works projects started by government, the spending often times not producing the desired results and leaving the nation in debt.
FDR’s own Secretary of the Treasury, is quoted as saying:
"We have tried spending money. We are spending more than we have ever spent before and it does not work… after eight years of this Administration we have just as much unemployment as when we started…And an enormous debt to >boot!" [3]
Economist Thomas Sowell adds:
“Franklin D. Roosevelt blamed the country's woes on the problems he inherited from his predecessor... But unemployment was 20 percent in the spring of 1939, six long years after Herbert Hoover had left the White House. Whole generations have been "educated" to believe that the Roosevelt administration is what got this country out of the Great >Depression.” [3]
Sowell, along with other economists have documented the failure of the New Deal along with numerous other deficit spending project that the government uses to manufacture a recovery in the economy. It is thoughtful that Donald Trump’s wall or any other deficit spending project. Regardless, the Trump administration will continue to try, as stated in the previous issue of the Expat Newsletter which detailed Trump’s comments and intentions to print money for his various projects.
Above is a screenshot of USDebtClock.org, a website that tracks US financial metrics, including US national sovereign debt. This is the total amount of indebtedness that is known for the United States. This amount has traditionally doubled every single time a new US president takes office. It currently stands at over $20 Trillion. George W. Bush started with $5 Trillion and ended with $9 Trillion, Obama started with $9 Trillion and Ended with $19 Trillion. If Donand Trump is to follow this lead, and we here at Expat Services expect him to, then his administration will take the national debt form $20 Trillion to $40 Trillion by the time he leaves office (assuming he is re-elected). The US national debt will be continue to be covered in this newsletter.