The Senate can pass tax reform with a simple majority but there is a catch.To use what is called the budget reconciliation process it cannot add to the deficit beyond the 10-year budget window.But the Trump administration isn't spending a lot of time tweeting about the looming debt crisis.In fact, they would like us to believe that their recently proposed tax reform will not only pay for itself but will actually reduce debt and deficits.
But the problem is that under either Reconciliation or Regular Order, passing tax cuts would mean that deficits would soar. But here is the rub, in the 1980's the National debt was 45% of GDP; but now it is 106% of GDP.
Those asset sales will cause massive ETF redemptions on the part of the investing public, which will send individual stock prices plummeting and push ETF prices into a death spiral.
Therefore, we should all be fully aware where all the inflation created by central banks ended up.
The forward 12-month PE ratio is 18, compared to the 10-year average of just 14.
The 12-month trailing PE for Pro-forma earnings, which takes into account non-recurring items that seem to recur ever quarter, is trading at 20 times earnings.