2025 6-11 Matters of Democracy Battle of LA, OBBA Fiscal Policy, Demographic Trends

The "Battle of Los Angeles" and its Political Ramifications. The ongoing clashes in Los Angeles are a dominant news story, characterized by their manufactured nature and political exploitation by the Trump administration. Governor Gavin Newsom (D-CA) and California AG Rob Bonta's request for an emergency injunction against federal troop deployment was denied. Most Republican senators support Trump's actions.

Nationwide Anti-ICE Protests

The "One Big Beautiful Bill Act" (OBBBA) and U.S. Fiscal Health. The OBBBA is expected to cause "Huge Near-Term Deficit Hikes over Current Law," with significant net revenue loss and net outlay cuts leading to a substantial net effect on the deficit.

If budget changes are permanent (i.e., "Absent Sunsetting"), the "Deficit Hikes are Huge in All Years," suggesting temporary or illusory spending cuts and revenue increases.

Projected deficits are anticipated to be "8% of GDP Full-Employment Deficits," indicating a significant structural imbalance.

While "Tariffs will Narrow the Deficits," it will be "just by a Bit," with projected deficits remaining high even with tariff revenue.

The "Net Interest Burden Expected to Rise Steeply," with the CBO projecting net interest outlays as a share of GDP to increase from 3.1% to 4.1% between 2024 and 2035.

CBO's interest rate projections (10-Year Treasury, 3-Month Treasury, and Federal Funds Rate) are questioned as potentially "Too Good to be True?" given the rising debt.

Demographic Trends and Their Implications

New Jersey Gubernatorial Primary

Rep. Mark Green (R-TN) is resigning from Congress for the second time. Green's departure will reduce the Republican majority to 219-212, leaving Speaker Mike Johnson with a "three-vote margin of error" if all members vote and Democrats stick together.