For those who care, ICE just had its budget increased from 9 billion to 130 billion dollars.
ICE now has a budget higher than the USMC (the marines). Then the NIH. Then NASA. Combined. And then doubled.
Their budget now equals that of the entire Russian military. The third largest military on the planet.
The gestapo just became an actual military.
And, no, it does not drop taxes on tips or overtime. It does include the cuts to healthcare and social nets, as well as trillions in tax cuts for the wealthy, while raising the debt by trillions.
The worst part is how many people are wholeheartedly clapping and cheering about this entire deal. AmeriKKKa is a sick place populated by bloodthirsty monsters.
I wouldn't even care that much if they weren't the number one exports destination down here. The ripple effects are going to be massive.
"OBBBA permanently allows immediate deductibility of R&E expenses rather than five-year amortization for R&E beginning after Dec. 31, 2024. Businesses with annual gross receipts of $31 million or less are allowed to apply this change retroactively for tax years beginning after Dec. 31, 2021."
However I couldn't find the actual bill text so take this source as you will.
$900 million in Medicare cuts. This means increased drug and procedure uncovered costs for recipients for people who rarely have the income or means to cover it.
$2 trillion in Medicaid cuts over 10 years. The most probably impact: homelessness is likely to double and it will be primarily very elderly and disabled people who aren't able to care for themselves and lack family. ~18% of elder care homes will go out of business because they depend on Medicaid payments for the bulk of their funding. More people living under bridges.
Pure cowardice from Mike Johnson and Chick Grassley, though I guess you can sort of understand why a 91-year old doesn’t care about selling out young people to line his own pockets.
It’s too bad young people don’t appear to care about being sold out.
It might not, depending on what happens with tariffs. Trump would need to find a lot of money in tariffs, though. So either way we pay for it, in tariffs or inflation.
So... how should one play this? I presume that the tariff revenue won't be enough. So we will have inflation, or we will have stagflation. I lived through stagflation, in the 1970s, but I wasn't old enough to understand it as an investment environment.
In light of this bill passing, where's a good place to put money?
You could buy assets. Be careful though, hyperinflation is pretty weird and a lot of stuff (real estate counterintuitively for example) performs pretty poorly in it. Basically you get the opposing price changes but also the same reaction to price volatility that you during a recession so there's just less liquidity. Some people are doing a bond calendar spread but then you're effectively gambling on FOMC decisions which isn't all that prudent. Someone I know got liquidated earlier this year trying that.
Crypto is actually one of the less crazy things to buy right now IMO if you can mentally handle that.
In general I would avoid holding debt (margin, mortgages, credit card it doesn't matter) because the interim can be pretty funky and hard to predict.
Stocks, I'd think. All of that extra money in the hands of the wealthy will go towards investments, and eventually into the market.
Probably some stocks and sectors will benefit more than others, but I think that a broad index fund will get you a lot of the benefit with none of the guesswork, and less risk.
There is, of course, the existential risk that the entire system will collapse. You could diversify out of the country, though I would expect any such crisis to ripple out everywhere.
For inflation, sure, stocks are good. For stagflation, I'm not so sure. The stagnation part is a headwind for stocks; the inflation is a tailwind, and I'm not sure how that works out.
Copying my comment from the Senate vote thread:
For those who care, ICE just had its budget increased from 9 billion to 130 billion dollars. ICE now has a budget higher than the USMC (the marines). Then the NIH. Then NASA. Combined. And then doubled.
Their budget now equals that of the entire Russian military. The third largest military on the planet.
The gestapo just became an actual military.
And, no, it does not drop taxes on tips or overtime. It does include the cuts to healthcare and social nets, as well as trillions in tax cuts for the wealthy, while raising the debt by trillions.
How fun.
The worst part is how many people are wholeheartedly clapping and cheering about this entire deal. AmeriKKKa is a sick place populated by bloodthirsty monsters.
I wouldn't even care that much if they weren't the number one exports destination down here. The ripple effects are going to be massive.
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Deleted my prior response because I was being too snarky.
Worth noting a couple of corrections: NASA had a 25% cut to 20B. NIH had a 40% cut to 25B.
Did it end up removing the tax weirdness about amortizing software development costs?
I think it did:
https://www.cbiz.com/insights/article/the-one-big-beautiful-...
"OBBBA permanently allows immediate deductibility of R&E expenses rather than five-year amortization for R&E beginning after Dec. 31, 2024. Businesses with annual gross receipts of $31 million or less are allowed to apply this change retroactively for tax years beginning after Dec. 31, 2021."
However I couldn't find the actual bill text so take this source as you will.
If so, this shouldn’t be flagged because it would be a significant event relevant to tech
I think you're asking if it adds it back, it got removed years ago and that's part of why the job market blew up.
No, it just amortized our morals as a country.
Another $3 trillion in debt from the "party of fiscal responsibility."
$900 million in Medicare cuts. This means increased drug and procedure uncovered costs for recipients for people who rarely have the income or means to cover it.
$2 trillion in Medicaid cuts over 10 years. The most probably impact: homelessness is likely to double and it will be primarily very elderly and disabled people who aren't able to care for themselves and lack family. ~18% of elder care homes will go out of business because they depend on Medicaid payments for the bulk of their funding. More people living under bridges.
Pure cowardice from Mike Johnson and Chick Grassley, though I guess you can sort of understand why a 91-year old doesn’t care about selling out young people to line his own pockets.
It’s too bad young people don’t appear to care about being sold out.
Listen, we have only tried trickle down tax cuts for the last 40 years. This time it will work!
https://www.congress.gov/bill/119th-congress/house-bill/1/te...
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It didn't cut nearly as much as it needed to or most of us hoped.
It cut nothing, the debt will accelerate.
It might not, depending on what happens with tariffs. Trump would need to find a lot of money in tariffs, though. So either way we pay for it, in tariffs or inflation.
So... how should one play this? I presume that the tariff revenue won't be enough. So we will have inflation, or we will have stagflation. I lived through stagflation, in the 1970s, but I wasn't old enough to understand it as an investment environment.
In light of this bill passing, where's a good place to put money?
You could buy assets. Be careful though, hyperinflation is pretty weird and a lot of stuff (real estate counterintuitively for example) performs pretty poorly in it. Basically you get the opposing price changes but also the same reaction to price volatility that you during a recession so there's just less liquidity. Some people are doing a bond calendar spread but then you're effectively gambling on FOMC decisions which isn't all that prudent. Someone I know got liquidated earlier this year trying that.
Crypto is actually one of the less crazy things to buy right now IMO if you can mentally handle that.
In general I would avoid holding debt (margin, mortgages, credit card it doesn't matter) because the interim can be pretty funky and hard to predict.
Stocks, I'd think. All of that extra money in the hands of the wealthy will go towards investments, and eventually into the market.
Probably some stocks and sectors will benefit more than others, but I think that a broad index fund will get you a lot of the benefit with none of the guesswork, and less risk.
There is, of course, the existential risk that the entire system will collapse. You could diversify out of the country, though I would expect any such crisis to ripple out everywhere.
For inflation, sure, stocks are good. For stagflation, I'm not so sure. The stagnation part is a headwind for stocks; the inflation is a tailwind, and I'm not sure how that works out.
LOL @ “cut”