Has U.S. Democracy Been Trumped?

[y66]

From Out of 42 top economists, only 1 believes the GOP tax bills would help the economy But all of them think it will increase the debt. by Ezra Klein:

 

The University of Chicago’s Booth School of Business runs an ongoing survey of top economists spanning a wide number of specialties and political outlooks. The panel includes multiple Nobel Prize winners, White House veterans, and former presidents of the American Economic Association. Recently, they were asked about the Republican tax reform bills. The results weren’t encouraging.

 

The first question was straightforward. Would they agree that if the US passed a tax bill “similar to those currently moving through the House and Senate,” GDP would be “substantially higher a decade from now”? Of the 42 economists polled, only one thought the Republican bill would boost the economy. The plurality said it wouldn’t, and the remainder were uncertain or didn’t answer.

 

The survey includes an optional space for respondents to add a comment, and a few of the comments are notable. “Of course not,” wrote the University of Chicago’s Austan Goolsbee, who served as chief economist for President Obama. “Does anyone care about actual evidence anymore?”

 

A number of the economists argued that tax policy simply isn’t as powerful a lever as Republicans want to believe. “Tax policy appears to have little effect at the margin on GDP growth in OECD countries,” wrote MIT’s David Autor, an eminent trade economist. “Doubt it will substantially change things either way,” wrote the University of Chicago’s Anil Kashyap. “Aside from the redistribution of wealth, hard to see this changing much,” wrote Richard Thaler, who just won the Nobel Prize in economics.

 

The only economist to say the bill would increase GDP was Stanford’s Darrell Duffie, and he added the concern: “Whether the overall tax plan is distributionally fair is another matter.”

 

The second question asked whether passage of the Republican tax bills would mean “the US debt-to-GDP ratio will be substantially higher a decade from now than under the status quo.” Here, too, the news was grim from Republicans. In this case, all but one economist agreed that the bills would blow up the deficit, and the outlier, Stanford's Liran Einav, turned out to have misread the question — he later clarified that he also agrees the bill would add to the debt.

 

“How could it be otherwise?” asked MIT’s Daron Acemoglu. “Cut taxes. Lose money. Repeat,” said Goolsbee. “This is at least is clear,” said Yale’s William Nordhaus: “No way the growth effects will be strong enough to offset the revenue losses.” Even Darrell Duffie, the sole economist who agreed that the bill would boost GDP, says the plan will pile on debt.

 

So here, then, is the verdict of the economics profession. The growth benefits of the Republican tax plans are either nonexistent or uncertain. The increase in debt, by contrast, seems certain.

[blackshoe]

I probably err by thinking of Marines from the non-officer POV - it seems to me those folks turn over their brains to the "corps" - a position I can't imagine adopting on a voluntary basis.

Having met quite a few Marine non-coms and junior enlisted, I have to disagree.

[blackshoe]

It seems to me that our economic plans should have several goals, some of which are at least at first glance, contradictory.

 

1. Reduce the National debt.

2. Balance the budget.

3. Decrease taxes.

4. Decrease expenditures.

5. There's probably more, but let's start with these.

 

I don't think "redistribute wealth" should be a goal, but some certainly do.

 

#1 sounds good, but how do we do that? If we just reduce taxes, that won't help. If we decrease taxes more than we decrease expenditures that won't help either.

#2 also sounds good, but again, how? I would start by asking "if we keep the same revenue (which means not reducing taxes) how much will we need to decrease expenditures to balance the budget?" Then we get into "which expenditures do we reduce, and by how much?" Spread it over five years, or ten, or twenty if you need to. I expect the folks whose ox is getting gored are going to be dragging their feet big time.

 

All I know is if we keep going the way we are we're going to be in the same boat we were in 230 years ago or so, and "not worth a Continental" or something very like it will be on everyone's lips again.

 

Interesting factoid: in terms of 1913 dollars (the year the Federal Reserve System was founded and, probably not coincidentally, the national Income Tax got started (via the 16th Amendment) the 2016 dollar was worth about 5 cents. Don't remember where I read that, so don't ask. I would imagine the current dollar is worth less.

[barmar]

It seems to me that our economic plans should have several goals, some of which are at least at first glance, contradictory.

 

1. Reduce the National debt.

2. Balance the budget.

3. Decrease taxes.

4. Decrease expenditures.

5. There's probably more, but let's start with these.

Why should #4 be a goal of its own? It seems like it should just be used as a means to address some of the other goals? E.g. tou can balance the budget either by increasing revenue, reducing expenditures, or both.

 

And in order to do #1, you have to do better than just balancing the budget, you need a net profit so you can pay down the debt. If you merely balance the budget, the debt stays where it is until the bonds are all paid off (and assuming no new bonds are issued).

 

BTW, it's not really feasible for the government to stop issuing bonds, even if they somehow got into a position where they didn't need to borrow money -- Treasury bonds are a critical component of financial markets.

[Zelandakh]

Why should #4 be a goal of its own?

Ed is a believer in smaller government. Therefore all of his aims tend to lean in this direction. So goals that do not appear on his list are for example fairness, equality and fiscal stability, which would probably be on most people's lists.

[hrothgar]

Ed is a believer in smaller government. Therefore all of his aims tend to lean in this direction. So goals that do not appear on his list are for example fairness, equality and fiscal stability, which would probably be on most people's lists.

 

 

Don't forget growth, not poisoning people ....

[Zelandakh]

Don't forget growth, not poisoning people ....

Well I am not sure I would regard not poisoning people (nor national security, law and order, education or health) as part of economic policy in the first instance although obviously there is a large degree of overlap as these things also cost money. Growth is sort of covered by Ed's points as the increased income it brings are directly beneficial to #1 and #2.

[awm]

It seems to me there are fairly simple steps we can take to improve the government’s fiscal outlook. These include:

 

1. Let Medicare negotiate prescription drug prices like other countries do.

2. Raise the minimum wage so that people who work full time don’t need to receive government benefits.

3. End military programs that the pentagon thinks are unnecessary. In the short term, use the savings to provide incentives for companies to relocate to districts where facilities have closed and/or job training for any displaced workers.

4. Increase funding to the IRS. This more than makes up for itself in increased revenue from catching tax dodgers.

5. Spend money on infrastructure. This will more than pay for itself by improving the business environment, mitigating damage from natural disasters, and improving the short-term jobs situation.

6. Get rid of some loopholes. Ones that stand out (to me) include carried interest, subsidies for “dirty” energy production, basis reset for inheritance that allows large fortunes to completely avoid capital gains tax, and the gap between capital gains rate and regualar tax rate. There are surely more on the corporate side that I’m less familiar with, but we have an environment where many profitable companies are paying zero. This also probably impacts economic fairness as bigger companies may be able to pay a lower rate than smaller startups.

7. Change the way debt is handled in the tax code. The current system allows a lot of abuses (wealthy people borrowing against their fortunes to avoid capital gains tax, some of the shenanigans hedge funds use to load profitable companies with debt to extract value, etc). This can probably raise revenue while also making the tax code fairer.

8. Fix the immigration system, allowing companies to keep high skill workers in the country when really needed (H1B) while preventing abuses. Also allowing “undocumented” people a path to citizenship and making sure they receive a fair wage and pay taxes. And allowing foreign graduates of US universities more freedom to stay and start their own businesses. Immigrants are generally good for the economy as long as they are working people (most are)! Obviously we need some immigration law, but it should be based around keeping criminals out, making sure most entrants have jobs lined up (some exceptions for refugees and/or close family members of long time residents is appropriate for humanitarian reasons of course) and that they are not undercutting the job market (taking jobs that citizens are ready/willing to do).

 

Anyway I’d note that none of these seems to be a Republican priority. There are actually one or two things in the tax bill that I like (getting rid of the “mortgage interest” deduction for second homes is one) but for the most part it seems like a budget-busting giveaway to the very wealthy. They don’t even seem to want a long-term middle class tax cut (which might stimulate the economy).

[cherdano]

Why should "Reduce National Debt" be a goal?

 

Perhaps it's worth reminding everyone that no one can make savings unless someone else is willing to borrow. Would you prefer to put your savings into subprime mortgages?

[PassedOut]

Why should "Reduce National Debt" be a goal?

Because tax receipts pay for interest on the national debt, reducing the revenue available for current expenses. That's not a huge problem now with interest rates very low, but when interest rates rise the impact is substantial. Given the current US government's manifest financial irresponsibility, that's a real risk.

[Al_U_Card]

Why should "Reduce National Debt" be a goal?

 

Perhaps it's worth reminding everyone that no one can make savings unless someone else is willing to borrow. Would you prefer to put your savings into subprime mortgages?

Doesn't the fractional reserve system (not to mention the loss of control of gov't finance) ensure that savers are disadvantaged over debtors? We are in a hole and they keep us digging....

[WellSpyder]

Perhaps it's worth reminding everyone that no one can make savings unless someone else is willing to borrow.

Bank notes in a suitcase under the bed?

[helene_t]

Bank notes in a suitcase under the bed?

That means that the central bank has borrowed money from you.

[WellSpyder]

That means that the central bank has borrowed money from you.

Not in any meaningful sense, in my view. Suppose they just turn on the printing presses for a bit, and then drop the resulting notes from a helicopter, which I collect and put under the bed. At what point does the borrowing occur?

[Al_U_Card]

Those banknotes (legal tender BUT non-redeemable in gold, silver or any other item of actual value) are "created" as debt instruments and it is the interest to be earned from their creation that will "power" the system that creates them. That is why banks always have the biggest and nicest buildings in a city...

[Winstonm]

More bad news for Teflon Don:

 

Reza Zarrab, a Turkish businessman accused of violating U.S. sanctions on Iran, pleaded guilty and will testify against his co-defendant, a federal court heard Tuesday. Zarrab's cooperation with federal prosecutors could have implications for Michael Flynn, who allegedly plotted on behalf of Turkish interests to help free Zarrab.

 

Tick-tock, tick-tock....

[Winstonm]

The Atlantic explains why a real news source couldn't be compromised by fake news.

 

Project Veritas was operating on the premise that The Washington Post wouldn’t exercise due diligence in vetting a young woman accusing a Republican Senate candidate of sexual misconduct—that the paper would report the bogus story in the newspaper, enabling Project Veritas to expose them for spreading a false allegation.

 

The premise that the newspaper spreads “fake news” is widely held on the populist right. But the premise proved incorrect. Washington Post reporters did not reflexively or opportunistically believe a woman falsely accusing a prominent Republican. They assigned multiple staffers to help vet the story’s credibility. And they were skillful enough at doing so that they discovered their source’s lies.

[jjbrr]

Sad!

[rmnka447]

So, I guess that the lesson is, when we want to insult knuckle dragging pedophiles who are either muslims or evangelicals, we should not be castigating them because they believe in Islam or because they are evangelicals, but rather because they are conservatives.

 

This is so patently ridiculous it's laughable. Pure progressive BS. A two word refutation - Kevin Spacey - who's been accused of gay pedophilia. If we want talk about those who sexually abuse or harass others maybe we ought to talk about all the other progressives as well - Harvey Weinstein, Ex-Amazon studio exec Roy Price, Louis C.K., Anthony Weiner, Sen. Al Franken, Rep. John Conyers, perpetrator in chief Bill Clinton and probably many more on the way to being exposed from the cesspool of Hollywood. I have no doubts that they'll be a few conservatives identified as well.

 

The behavior you want to get on your high horse about isn't just a phenomenon of the right, it's across all of society. But progressives try to claim moral supremacy and pin it all on conservatives. Sorry, that just doesn't wash.

 

How about the comical dance Sen. Franken is trying to perpetrate saying " I'm really a champion of women and am sorry this harassment behavior occurred." Let's be honest, if Franken was a conservative, progressives would be all over him to resign because his behavior was unacceptable. But progressives are saying exactly what conservatives say when any accusations occur - let him have his due process. That speaks to the double standard the progressives feel entitled to. No matter what your political views, unacceptable behavior is always unacceptable.

[jjbrr]

wait, what? whom did bill clinton abuse or harass?

[jjbrr]

oh ok. i found an article. carry on.

[Winstonm]

This is so patently ridiculous it's laughable. Pure progressive BS. A two word refutation - Kevin Spacey - who's been accused of gay pedophilia. If we want talk about those who sexually abuse or harass others maybe we ought to talk about all the other progressives as well - Harvey Weinstein, Ex-Amazon studio exec Roy Price, Louis C.K., Anthony Weiner, Sen. Al Franken, Rep. John Conyers, perpetrator in chief Bill Clinton and probably many more on the way to being exposed from the cesspool of Hollywood. I have no doubts that they'll be a few conservatives identified as well.

 

The behavior you want to get on your high horse about isn't just a phenomenon of the right, it's across all of society. But progressives try to claim moral supremacy and pin it all on conservatives. Sorry, that just doesn't wash.

 

How about the comical dance Sen. Franken is trying to perpetrate saying " I'm really a champion of women and am sorry this harassment behavior occurred." Let's be honest, if Franken was a conservative, progressives would be all over him to resign because his behavior was unacceptable. But progressives are saying exactly what conservatives say when any accusations occur - let him have his due process. That speaks to the double standard the progressives feel entitled to. No matter what your political views, unacceptable behavior is always unacceptable.

 

Quite amazing.

 

I made an initial post from New Testament verses that showed that the Christian Bible considered women subservient to men, and I noted that evangelical Christians accept those words as the word of God. Richard then made a wry post that was quite clever showing that this thinking is fundamental to others besides the religious.

 

 

You have taken this off-road into a who-did-who-to-what that is not related to the subject. Were we too subtle for you?

[Zelandakh]

You have taken this off-road into a who-did-who-to-what that is not related to the subject. Were we too subtle for you?

You are naive Winston. Have you ever seen an American conservative actually address an issue like this when raised rather than counter-attack on a completely different tack? Why would you expect any difference here? :blink:

[Winstonm]

You are naive Winston. Have you ever seen an American conservative actually address an issue like this when raised rather than counter-attack on a completely different tack? Why would you expect any difference here? :blink:

 

You have a point. Whataboutism is a misdirection ploy, i.e., not only moving goalposts but claiming the game never had any goalposts to begin with.

[RedSpawn]

There seems to be an undercurrent in some parts of the Republican party that the proper role of government is to organize (white, male) Americans into a gang to beat up on everyone else and share the spoils, and the best country is the one most capable of beating up on everyone else. (Note: This is not at all a solely American phenomenon; the European far right, which controls a few Central European countries, believes this to a much larger degree.)

 

From this point of view, people who are trying to make America into a just nation are in fact trying to change this country for the worse.

Politics is the activities associated with the governance of a country, especially the debate or conflict among individuals and/or parties having or hoping to achieve power.

 

Now that we have established the foundation for politics, America's current politics has been disguised as a "White male" undercurrent, but what is really going on is:

 

The global economy doesn't submit to the laws, whims, or ingrained power structure of America's nation-state. America has traditionally been founded as a country (nation-state) whose powerful institutions were controlled by white Anglo-Saxon men for the benefit of white Anglo-Saxon men.

 

The global economy challenges this dynamic. The global economy cares about monetary greenbacks—not tribal symbolism. Corporate America, also beholden to the mores of the global economy, doesn't care about preserving a white male majority in its employment ranks; instead, it cares about increasing shareholder value.

 

This "attack" on the will of America's nation-state and the march towards a well-connected global economy causes temporary instability in labor markets, upsets market fundamentals that we thought were guided by an Invisible Hand, and threatens the financial livelihood of several white collar and blue collar white men who are accustomed to the nation-state protecting their interests above others.

 

The global economy isn't a sympathetic soul, however. It isn't an astute history major either, so it cares not about preserving white privilege in America's institutions. White privilege wasn't a major problem or hideous moral failing when the benefactors and electorate looked exactly the same from a tribal perspective.

 

The global economy also doesn't care about protectionism, nor does it care about isolationism. It cares about commerce, productivity, performance metrics, bottom lines, and profit margins. Job security and political empowerment of people are not the global economy's major concern unless it directly and adversely impacts the production or distribution of natural and human resources.

 

Bottom line: White privilege is a CULTURAL problem NOT a COMMERCE problem.

 

White privilege is a moral failing that had huge implications in the outcomes of America's business, educational, legal, social, political, financial, and economic institutions. Americans tend to forget how systemic white privilege was in the administration of national policy. So, it's natural that as we align with the interests of a global economic order, we are alarmed and surprised to learn we can't foist our old, tired racial order on the broader global economy.

 

In addition, the preservation of white privilege is NOT a human rights issue—never has been, never will be. White privilege is an entitlement problem. And all chickens eventually come home to roost.

 

The global economy has evolved and takes no prisoners. Now, it's time for America to EVOLVE in its race relations or suffer the geopolitical consequences for remaining overly sentimental to an old establishment.

 

America appears stuck and ineffectual at addressing the needs and concerns of a people steamrolled by an unforgiving global economy. And the displaced are thirsty for anyone to explain this paradigm shift and promise protection from the ruthless efficiency of the new global order.

 

Enter snake oil salesman. . .with unrealistic promises of restoring the old racial order and dictating the terms and conditions of an evolving global economy.