Thread by @johnkonrad

Why Can’t Politico Make Payroll Without USAID?

More importantly: Could this be the start of a 2008 type collapse—not for Wall Street, but for NGOs and media organizations? 🧵

https://twitter.com/adamscrabble/status/1887001251168047458

To be clear, I don’t have insight into Politico’s financials.

But if they don’t collapse, other NGOs and grant recipients might.

Here’s why.

There are two major problems with these massive government grants, and they go far beyond just funding.

1. The U.S. Government Is the Ultimate Backstop

Most businesses keep cash reserves or credit lines in case a customer can’t pay.

But when your “customer” is the U.S. government—an entity that can’t go bankrupt—you don’t need reserves.

The money always flows, so businesses operating on government grants treat that income as guaranteed.

2. The Illusion of Stability

Until the election, Democrats had an iron grip on institutions—Congress, the White House, think tanks, media, academia. The idea that this power structure could suddenly collapse seemed unthinkable. Why prepare for something you don’t believe can happen?

But Here’s the Real Problem

These grants aren’t just revenue—they’re collateral used by NGOs and media companies to secure massive loans. Banks see stable, recurring government funding and happily lend against it.

And because US Government revenue is very stable… the total amount you can borrow is larger.

Now, with funding pulled and uncertainty rising, those loans are in jeopardy.

Elon Musk isn’t just cutting off their cash flow. He’s yanking the foundation out from under their entire financial structure.

So why can’t Politico make payroll? I don’t know for sure, but it’s not far-fetched to think their banks are demanding new collateral for their loans.

And, more certainly, without those grants, new credit lines aren’t coming.

And it’s not just Politico that will have to answer to the Banks but every NGO with bank loans AND NGOs that might want to apply for bank loans.

The big NGOs might be able to squeeze donors but that will suck money away from smaller organizations

This isn’t just about losing a grant—it’s an entire financial house of cards collapsing.

But here’s another MSJOR concern:

In 2009, Obama bailed out Wall Street.

IF (big if) NGOs start toppling, Trump will save some… but I doubt he’s cutting bailout checks for trans rights activists in the Congo.

I do not know for certain what will happen but if you work for a left leaning NGO it might be time to update your resume.

This all leads to many unanswered questions

➡️ Which NGOs or media outlets do you think are most at risk?
➡️ Who else is using government grants as collateral for massive loans?
➡️ What happens when banks realize these “guaranteed” revenue streams aren’t so guaranteed anymore?
➡️ What types NGOs (food aid, national security, ect) should be protected?

Big picture: The media-NGO complex didn’t just spend government grants—many have probably leveraged grants for massive loans. Now that the money flow is in question, so is their entire financial structure.

This isn’t just about cutting @politico’s funding—it’s about banks reassessing risk, pulling credit lines, and forcing a reckoning for countless organizations that thought government cash was a forever guarantee.

@politico And here’s the kicker:

Trump might not have to lift a finger.

Even if he saves USAID, banks could still reassess risk and tighten NGO credit. Employees start looking for the exits.

The entire NGO-industrial complex might just deflate under its own weight.