Impressed by the Trump administration part II

posted by Devils Advocate

25890

give credit when due

To be fair, the market is up 11% this year already just 4 months and a few days. In good years that is a whole year's worth of growth.

posted by jmog

Spending as % GDP has gone down each of the last 2 years. Actual spending has gone up, but compared to GDP is has not.

 

You have always been a proponent of spending whatever it takes, only recently (probably to fit your narrative) have you been just as "happy" with tax cuts bringing in "less revenue".  

 

Since Spending as a percent GDP has gone down it kind of debunks your Keynesian philosophy no matter how you try to move the goal posts to act like you are all for tax cuts all the sudden since it is "deficit creating". You never cared about deficits, that part is true, but you were always on the "just spend more money regardless of the deficit" you never cared about cutting taxes until Trump did it and it has worked.

The key is the deficit as a percentage of gdp - tax cuts financed by deficits that spur aggregate demand are just as much Keynesian policy as direct gov't purchases financed by deficits. (Not all deficit spending is equal but it is all better than austerity. Some deficit financed fiscal stimulus is more effective than others but it is all "Keynesian." For example, I support the deficit financed TCJA but payroll tax cuts would have been even more effective IMHO): 

And you're right in one sense - the Keynesian tax cuts were large enough to give enough a jolt to GDP that the huge surge in real federal discretionary spending (e.g. Trump's big government bail out of farmers, the military expenditure build-up, etc.) did not keep pace with the increase in GDP: 

If it weren't for Trump's idiotic trade war and increasing taxes via tariffs that reduce the positive effects of the TCJA we'd be doing even better. 

Re the claim that I am only for deficits caused by tax cuts now - that's simply false. Go back and re-read through the archive. I've always said "increase the deficit" - whether through spending or tax cuts. For example, I've always considered payroll tax cuts to be a better option than increasing direct spending - all things being equal. Consider these posts from April of 2013 (6 years ago) from the archive: 

In a monetary economy with a fiat currency and free-floating exchange rates and interest rates at the zero bound when there is a current account deficit, it is desirable for the government to to put more of the sovereign currency into the economy whether through more direct government purchases or tax rebates or tax cuts or central bank asset purchases to the point where it matches or is greater than the desire of the non-government sector to save/pay down private debt. 

In fact, more government spending/injection of U.S. dollars into the hands of ordinary American's through expansionary fiscal policy...i.e. huge tax rebates, tax reductions or large government purchases of goods and services actually only has good consequences when the private sector is trying to save.

"Trump did it and it worked" - indeed, Trump has vindicated these posts from 2013 and is really a post-Keynesian on fiscal policy (Traditional Keynesians would be calling for deficit reduction at this point - a mistake in my view) - wanting to run huge deficits even in good times which in my view is necessary for countries that run huge trade/current account deficits. And, he's calling for the fed to CUT rates. Yay!

If we can get passed the damage done to America's reputation around the world and get through the next few years without some crisis resulting from Trump's idiocy like a war with Iran or Venezuela - thank God for this experiment that is Donald J. Trump. He has shown beyond doubt that we can run the kind of deficits I've said we can run even in a good economy and we still aren't blowing past the Fed's inflation target and interest rates on treasuries have not soared into oblivion like they naysayers claimed. And, he's proven beyond doubt the complete fraud that deficit-hawkery is and was in the Republican party. Through it all, the Dems might finally be waking up (slowly but surely) that they too can run fiscal policy the same way or even better rather than being fooled into trying to prove that "dEmz ArE MoaR F1sCallY RuhSponS1bull"

posted by BoatShoes

 

The key is the deficit as a percentage of gdp - tax cuts financed by deficits

 

If we can get passed the damage done to America's reputation around the world and get through the next few years without some crisis resulting from Trump's idiocy like a war with Iran or Venezuela - thank God for this experiment that is Donald J. Trump. He has shown beyond doubt that we can run the kind of deficits I've said we can run even in a good economy and we still aren't blowing past the Fed's inflation target and interest rates on treasuries have not soared into oblivion like they naysayers claimed. And, he's proven beyond doubt the complete fraud that deficit-hawkery is and was in the Republican party. Through it all, the Dems might finally be waking up (slowly but surely) that they too can run fiscal policy the same way or even better rather than being fooled into trying to prove that "dEmz ArE MoaR F1sCallY RuhSponS1bull"

The tax cuts were NOT financed by deficits.

The tax cuts have resulted in MORE revenue to the treasury.  Without the cuts in the marginal tax rates, economic activity would not have been spurred to such an extent resulting in more tax revenue.

How many God damn times do we have to go through this?

As for our reputation around the world; it is pretty clear that we are regaining the respect that was pissed away over the last 10 years.  We are the leader; not the rogue states follower.  

Get in the game!

And again ……..more WINNING -

Fiat Chrysler gets approvals for planned Mich. expansion

Detroit City Council approved land deals and community benefits involved in Fiat Chrysler Automobiles' plans to construct a $1.6 billion assembly plant and spend $900 million to upgrade another. Construction is expected to begin soon, a Fiat Chrysler executive said.

The Detroit News (5/21),  The Associated Press (5/21) 

posted by BoatShoes

The key is the deficit as a percentage of gdp - tax cuts financed by deficits that spur aggregate demand are just as much Keynesian policy

You do understand that Keynes never advocated for perpetual deficits?  So your "deficit as a % of GDP..." is nonsense not supported by any theory, aside from the MMT clowns.  It would be equally laughable to try to claim inflation in the 70's/80's was the result of too small a budget deficit - see, Reagan increased the deficit and inflation went down!

posted by gut

You do understand that Keynes never advocated for perpetual deficits?  So your "deficit as a % of GDP..." is nonsense not supported by any theory, aside from the MMT clowns.  It would be equally laughable to try to claim inflation in the 70's/80's was the result of too small a budget deficit - see, Reagan increased the deficit and inflation went down!

I said as much in my post Gut. I am an original "MMT Clown". 

And yes Gut, too large of a budget deficit that pushes aggregate demand beyond supply-side capacity. In this world with a global supply side - despite huge deficits we're not even in the universe of 70's style inflation. 

posted by QuakerOats

 

If we can get passed the damage done to America's reputation around the world and get through the next few years without some crisis resulting from Trump's idiocy like a war with Iran or Venezuela - thank God for this experiment that is Donald J. Trump. He has shown beyond doubt that we can run the kind of deficits I've said we can run even in a good economy and we still aren't blowing past the Fed's inflation target and interest rates on treasuries have not soared into oblivion like they naysayers claimed. And, he's proven beyond doubt the complete fraud that deficit-hawkery is and was in the Republican party. Through it all, the Dems might finally be waking up (slowly but surely) that they too can run fiscal policy the same way or even better rather than being fooled into trying to prove that "dEmz ArE MoaR F1sCallY RuhSponS1bull"

 

The tax cuts were NOT financed by deficits.

The tax cuts have resulted in MORE revenue to the treasury.  Without the cuts in the marginal tax rates, economic activity would not have been spurred to such an extent resulting in more tax revenue.

How many God damn times do we have to go through this?

 

As for our reputation around the world; it is pretty clear that we are regaining the respect that was pissed away over the last 10 years.  We are the leader; not the rogue states follower.  

 

Get in the game!

 

Jmog gave your answer which we have indeed gone over before ( but you can't shake the faith of a true believer). Nominal tax receipts have risen as tgey always do but they haven't as a percentage of gdp. 

Tell us Quaker - what do you think is the cause of Trump's trillion dollar deficits even in a booming economy? Why do you not post daily articles about the soaring debt and deficit. 

To paraphase the GOP congressman with a spine - Justin Amash - "Turns out Republicans weren't really for smaller gov't. They just didn't like the president".

posted by BoatShoes

To paraphase the GOP congressman with a spine - Justin Amash - "Turns out Republicans weren't really for smaller gov't. They just didn't like the president".

Not that this should come as any sort of a surprise, but I kinda dig that guy.

posted by BoatShoes

....despite huge deficits we're not even in the universe of 70's style inflation. 

Who said deficits drive inflation?  I'm not sure you've ever understood the concepts and arguments being discussed.

But, sure, there are global forces helping to keep inflation at bay.  That's not exactly an endorsement for massive increases in the debt, but simply kicking the can down the road.

Maybe it is just a case of not having to outrun the bear.  Nevertheless, ample empirical evidence PROVES high debt is correlated with high unemployment, higher taxes and lower growth.  And plenty of economic theory tells us why that is.

So your eagerness to declare a new normal because the canary hasn't died yet isn't the least bit compelling.

posted by gut

Who said deficits drive inflation?  I'm not sure you've ever understood the concepts and arguments being discussed.

But, sure, there are global forces helping to keep inflation at bay.  That's not exactly an endorsement for massive increases in the debt, but simply kicking the can down the road.

Maybe it is just a case of not having to outrun the bear.  Nevertheless, ample empirical evidence PROVES high debt is correlated with high unemployment, higher taxes and lower growth.  And plenty of economic theory tells us why that is.

So your eagerness to declare a new normal because the canary hasn't died yet isn't the least bit compelling.

We MMTers say that. The limit on a monetarily sovereign country's ability to run "deficits" is the real capacity of the economy. Accordingly - assuming the central bank doesn't offset expansionary fiscal policy with tighter monetary policy (Ironically this is why Trump is hammering the Fed because he views the FOMC as tempering the effects of the TCJA by tightening. I agree! Trump! The MMT hero we need!) - too large of a deficit can generate demand-pull inflation. 

High public debts only drag on economies without monetary sovereignty e.g. Greece which has to pay its debts in Euros. 

7 or so years now since the "Economic Collapse is Inevitable Thread." Continually proclaiming that the Canary's death is coming while it never comes is nit compelling. 

Ohio’s unemployment rate has hit an 18-year low, according to state data, falling to 4.3% last month. That is the lowest level since July 2001. Several Ohio counties have seen their jobless rate fall below 3.5%. Meanwhile, the national unemployment rate is 3.6%.

Year-over-year, Ohio's non-agricultural jobs have grown by 44,000, with 2,900 new jobs in the manufacturing sector.

 ….but what the hell, let’s do socialism

posted by BoatShoes

High public debts only drag on economies without monetary sovereignty e.g. Greece which has to pay its debts in Euros.

This demonstrates an absurd level of ignorance of economic history, but you've shown over and over you know neither the history nor fundamental theory.  Japan, for one, proves you wrong....and I could rattle off probably 2 dozen other examples without much trouble.  There's a mountain of empirical data of slower growth, higher inflation and higher unemployment with high public debt levels at countries that could print their own currency.  The claim you made above is unequivocally false.

MMT is a quack theory that appears to be primarily promoted by socialists that know their programs can never be funded by taxes alone.

posted by QuakerOats

 

Ohio’s unemployment rate has hit an 18-year low, according to state data, falling to 4.3% last month. That is the lowest level since July 2001. Several Ohio counties have seen their jobless rate fall below 3.5%. Meanwhile, the national unemployment rate is 3.6%.

 

Year-over-year, Ohio's non-agricultural jobs have grown by 44,000, with 2,900 new jobs in the manufacturing sector.

 

 

 

 

 

 ….but what the hell, let’s do socialism

https://www.cleveland.com/entertainment/2019/05/ohio-ranked-12th-worst-state-in-the-us.html

posted by gut

This demonstrates an absurd level of ignorance of economic history, but you've shown over and over you know neither the history nor fundamental theory.  Japan, for one, proves you wrong....and I could rattle off probably 2 dozen other examples without much trouble.  There's a mountain of empirical data of slower growth, higher inflation and higher unemployment with high public debt levels at countries that could print their own currency.  The claim you made above is unequivocally false.

MMT is a quack theory that appears to be primarily promoted by socialists that know their programs can never be funded by taxes alone.

Provide some links if you are so confident. Ironically Japan is a good example that proves us right! Why are they still able to sell gov't securities at such low rates despite high amounts of debt? Sovereign currency. The Gut's of the world have been saying the end for Japan is imminent for over a quarter of a century and yet it remains a hugely prosperous nation. 

The Japanese keep making mistakes like the impending sales tax hike to stupidly reduce the deficit. They need to increase the deficit with policies that will address The serious problems on the supply side with their aging population and unwillingness to have children e.g. something like huge child tax credits or immigration reform. Japan needs to go all-in. The persistent return to trying to follow the Gut's of the world's advice to close the deficit keeps holding them back. 

MMT is gaining ground by the day. Marco Rubio just put out a paper in which he cited MMT founding economists. MMT allows for policies that cohere with both conservative and progressive values. Indeed, the American GOP has functionally been operating the federal gov't under MMT principles w/ conservative branding (tax cuts pay for themselves) since Reagan. Donald Trump has thankfully just dialed it up to 11 (save the idiotic trade war). 

But hey Gut will go on proclaiming inevitable doom for the rest of his life and never change his mind like the false preachers who say judgment day is coming no matter how many times their prediction is wrong). 

posted by geeblock

https://www.cleveland.com/entertainment/2019/05/ohio-ranked-12th-worst-state-in-the-us.html

 

What’s your point?  Maybe you should move, to California.

posted by QuakerOats

 

Ohio’s unemployment rate has hit an 18-year low, according to state data, falling to 4.3% last month. That is the lowest level since July 2001. Several Ohio counties have seen their jobless rate fall below 3.5%. Meanwhile, the national unemployment rate is 3.6%.

 

Year-over-year, Ohio's non-agricultural jobs have grown by 44,000, with 2,900 new jobs in the manufacturing sector.

 

 

 

 

 

 ….but what the hell, let’s do socialism

You sound like a bitter, bitter person.  

posted by Dr Winston O'Boogie

You sound like a bitter, bitter person.  

Could not be happier ……….strong economy, taxes and regulations cut, Trump headed for reelection, liberals going off the deep end, and the long Memorial Day Weekend is upon us.  May those who sacrificed their lives for freedom and the safety of their fellow American citizens be at peace in the palm of His hand.

Take care.

Nice to see Trump’s strategy working in less than 48 hours.  Mexicans already blocking Central American immigrants at the Guatemala border. 

posted by geeblock

https://www.cleveland.com/entertainment/2019/05/ohio-ranked-12th-worst-state-in-the-us.html

 

Alaska comes in 45th in natural environment in their survey. I would like to know more about their scoring system...