zitothebrave
Connoisseur of Minors
[tw]1527002709743763457[/tw]
Economics Thread
- Thread starter sturg33
- Start date
acesfull86
Well-known member
https://www.creators.com/read/veronique-de-rugy/06/22/when-will-magical-economic-thinking-from-biden-and-co-end
Writing in The Wall Street Journal, the president outlined three policy choices to deal with an inflation caused, he seems to believe, largely by pandemic-related supply-chain obstructions and intensified by the war in Ukraine. His plan is simple: continue to trust that one of the main architects of our current inflation, Federal Reserve Chairman Jerome Powell, will raise interest rates fast and high enough to tame inflation without crashing the economy, dispense more subsidies and tax credits, and let the deficit melt away — by some miracle — without cutting spending.
Absent from the piece is any acknowledgement of what readers of this column know all too well: that inflation was fueled by Biden's own reckless spending policies, especially the $1.9 trillion American Rescue Plan passed in March 2021. Half a dozen or so studies have shown that fiscal policies implemented during COVID-19 are a main culprit behind today's inflation. Biden also fails to mention the Fed's overly accommodating monetary policy and its current slow response to inflation.
In other words, the president's argument is amazing for its tone-deafness, inconsistent thinking and sheer economic ignorance.
…
Yet the most striking part of Biden's op-ed comes at the end. He notes correctly that "we need to keep reducing the federal deficit, which will help ease price pressures." That's true. But it is also obvious that he has no intention of cutting spending — the most effective way to achieve his goal. After all, he proudly lists additional spending programs he'd like to implement while calling for more handouts for crony industries.
The president goes on to brag about the deficit reduction that took place since he took office — a reduction, he asserts, that happened because he succeeded in "winding down emergency programs responsibly." That's fascinating, since the only reason there was any such winding down is that BBB — which would have made permanent many of these emergency programs — was killed when Democratic Sens. Kyrsten Sinema and Joe Manchin joined Republicans in opposition.
Writing in The Wall Street Journal, the president outlined three policy choices to deal with an inflation caused, he seems to believe, largely by pandemic-related supply-chain obstructions and intensified by the war in Ukraine. His plan is simple: continue to trust that one of the main architects of our current inflation, Federal Reserve Chairman Jerome Powell, will raise interest rates fast and high enough to tame inflation without crashing the economy, dispense more subsidies and tax credits, and let the deficit melt away — by some miracle — without cutting spending.
Absent from the piece is any acknowledgement of what readers of this column know all too well: that inflation was fueled by Biden's own reckless spending policies, especially the $1.9 trillion American Rescue Plan passed in March 2021. Half a dozen or so studies have shown that fiscal policies implemented during COVID-19 are a main culprit behind today's inflation. Biden also fails to mention the Fed's overly accommodating monetary policy and its current slow response to inflation.
In other words, the president's argument is amazing for its tone-deafness, inconsistent thinking and sheer economic ignorance.
…
Yet the most striking part of Biden's op-ed comes at the end. He notes correctly that "we need to keep reducing the federal deficit, which will help ease price pressures." That's true. But it is also obvious that he has no intention of cutting spending — the most effective way to achieve his goal. After all, he proudly lists additional spending programs he'd like to implement while calling for more handouts for crony industries.
The president goes on to brag about the deficit reduction that took place since he took office — a reduction, he asserts, that happened because he succeeded in "winding down emergency programs responsibly." That's fascinating, since the only reason there was any such winding down is that BBB — which would have made permanent many of these emergency programs — was killed when Democratic Sens. Kyrsten Sinema and Joe Manchin joined Republicans in opposition.
nsacpi
Expects Yuge Games
I agree with most of this. But I will note that increasing taxes also works to reduce the deficit and to reduce demand. Maybe the author of the article has some sort of ideological opposition to it. That's fine. But it is an option. I dare say it can even be done without raising the taxes of the vast majority of households. Ultimately bringing down inflation will have to involve reducing demand. It will happen through a combination of higher interest rates, reduced spending and higher taxes. The timing and mix are the things in question.
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acesfull86
Well-known member
Percentage of GDP:
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We’ve tried all number of different tax schemes for the past 50-100 years and have never seen revenues as a % of GDP consistently top 20%. We know that spending is projected to be well above 20% into the future, so it seems to me that should be the focus. Not that I expect it to be given the party in power.
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We’ve tried all number of different tax schemes for the past 50-100 years and have never seen revenues as a % of GDP consistently top 20%. We know that spending is projected to be well above 20% into the future, so it seems to me that should be the focus. Not that I expect it to be given the party in power.
nsacpi
Expects Yuge Games
Other countries, some quite prosperous, do it routinely. There is nothing magical about 20%. But I would be happy to settle for 19%. It's ok to have an ideological opposition to higher taxes. But it should be acknowledged for what it is.Percentage of GDP:
—————
We’ve tried all number of different tax schemes for the past 50-100 years and have never seen revenues as a % of GDP consistently top 20%.
Ultimately I suspect reducing demand and inflation will entail an all of the above approach. Higher interest rates. Cuts to spending. And increases to taxes. It will be a question of timing and mix.
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acesfull86
Well-known member
It would be nice to have some evidence that we can sustain it. Couldn’t do it even back when top marginal rates were 70-90%, which I think is a bit higher than anyone would seriously propose. There may be nothing magical about 20%, but I’d rather use the last 100 years of history than hope we can buck a long sustaining trend.
The best the government can do is raise rates. Then the folks who ultimately pay will make behavioral decisions and actual revenues will go up, down, or stay the same.
But a spending cut (an actual cut, not shenanigans passed off as one) will go right to the bottom line.
Though it’s really not even worth a discussion when the national conversation right now is whether the federal government should write off over a trillion dollars of student loan debt, or merely a few hundred billion. Clearly there is no appetite for a substantial spending cut.
The best the government can do is raise rates. Then the folks who ultimately pay will make behavioral decisions and actual revenues will go up, down, or stay the same.
But a spending cut (an actual cut, not shenanigans passed off as one) will go right to the bottom line.
Though it’s really not even worth a discussion when the national conversation right now is whether the federal government should write off over a trillion dollars of student loan debt, or merely a few hundred billion. Clearly there is no appetite for a substantial spending cut.
nsacpi
Expects Yuge Games
I'll just own up to my own ideological preference. Which is to use the tax code to reduce some of the enormous income inequality that has emerged in recent decades. If we can accomplish this and reduce the deficit and reduce inflation I would regard this as a win-win-win. And to be sure, there are areas of federal spending that can and should be cut.
sturg33
I
the lack of understanding of what drove the income inequality is astounding
typical of the academics to be so in the dark to reality
acesfull86
Well-known member
https://reason.com/2022/06/07/joe-bidens-solar-panel-tariffs-are-a-national-security-threat-says-joe-biden/
The president invoked executive power in an attempt to increase the supply of solar panels in America—and he did it just four months after invoking executive power to decrease the supply of solar panels in America.
Let's flash back to February. That's when a series of tariffs on solar panels (and component parts) originally imposed by the Trump administration were set to expire. Rather than letting them simply fade away, Biden re-upped the tariffs (at a rate of over 14 percent) for the next four years. He did that despite ample warnings from the solar industry about the toll that the tariffs had already extracted: a net loss of 6,000 solar manufacturing jobs and an overall loss of about 62,000 solar industry jobs as a whole, according to the Solar Energy Industries Association, a trade group.
Biden plowed ahead anyway. It was a decision that effectively prioritized domestic solar panel production over other aspects of the solar industry—like installation. Domestic producers are, in theory anyway, the beneficiaries of tariffs that make goods manufactured in other countries more expensive to import, which means people will buy fewer of them. Now that people are buying fewer solar panels, Biden has declared this to be a national emergency that requires the use of executive powers intended for wartime.
…
It's far from clear how Biden's use of the Defense Production Act will address these problems. For that matter, it's not clear how Biden's use of the Defense Production Act is even appropriate—it's a law meant to be used during wartime, not a convenient way for a president to centrally plan a sector of the economy (that he's simultaneously trying to sabotage with a different set of powers). It's also not a magic wand that a president can use to make the consequences of other policies vanish into thin air.
Like most industries that involve building things, the solar industry in America needs two conditions to grow: reliable supply chains to provide access to goods produced anywhere in the world and greater private investment. Tariffs make the former more complicated and expensive while introducing uncertainty that scares away the latter.
If Biden wants to "accelerate domestic production," he should stop layering new, contradictory orders into the market and simply get government out of the way.
—————
Joe must be overdue for a nap
The president invoked executive power in an attempt to increase the supply of solar panels in America—and he did it just four months after invoking executive power to decrease the supply of solar panels in America.
Let's flash back to February. That's when a series of tariffs on solar panels (and component parts) originally imposed by the Trump administration were set to expire. Rather than letting them simply fade away, Biden re-upped the tariffs (at a rate of over 14 percent) for the next four years. He did that despite ample warnings from the solar industry about the toll that the tariffs had already extracted: a net loss of 6,000 solar manufacturing jobs and an overall loss of about 62,000 solar industry jobs as a whole, according to the Solar Energy Industries Association, a trade group.
Biden plowed ahead anyway. It was a decision that effectively prioritized domestic solar panel production over other aspects of the solar industry—like installation. Domestic producers are, in theory anyway, the beneficiaries of tariffs that make goods manufactured in other countries more expensive to import, which means people will buy fewer of them. Now that people are buying fewer solar panels, Biden has declared this to be a national emergency that requires the use of executive powers intended for wartime.
…
It's far from clear how Biden's use of the Defense Production Act will address these problems. For that matter, it's not clear how Biden's use of the Defense Production Act is even appropriate—it's a law meant to be used during wartime, not a convenient way for a president to centrally plan a sector of the economy (that he's simultaneously trying to sabotage with a different set of powers). It's also not a magic wand that a president can use to make the consequences of other policies vanish into thin air.
Like most industries that involve building things, the solar industry in America needs two conditions to grow: reliable supply chains to provide access to goods produced anywhere in the world and greater private investment. Tariffs make the former more complicated and expensive while introducing uncertainty that scares away the latter.
If Biden wants to "accelerate domestic production," he should stop layering new, contradictory orders into the market and simply get government out of the way.
—————
Joe must be overdue for a nap
Tapate50
Well-known member
He’s making Trump out to be a genius. Hard to do right there
It was great for some people and that’s why some pushed so hard for it despite the fact hundreds of millions were pushed into poverty globally.
Oh no the flu!!!!
sturg33
I
the laptop class lectured people for a year about how selfish they were if they wanted to work, or get exercise, or go to their parent's funeral.
and unbelievable display of narcism and selfishness by the well off.
I hope nobody forgets
57Brave
Well-known member
Jon Cooper
@joncoopertweets
·
23h
Facts matter:
Average domestic oil production under President Biden is now HIGHER
than under Trump or any past president. Republicans who say gas prices
are high because Biden somehow shut down American energy production
are just plain LYING.
@joncoopertweets
·
23h
Facts matter:
Average domestic oil production under President Biden is now HIGHER
than under Trump or any past president. Republicans who say gas prices
are high because Biden somehow shut down American energy production
are just plain LYING.