Author Topic: I thought Republicans where fiscal conservative?  (Read 929 times)

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Re: I thought Republicans where fiscal conservative?
« Reply #30 on: February 13, 2018, 09:34:43 AM »

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One impact of the tax cut and subsequent spending increase is that this increased borrowing by the Government (in the form of issuing Treasury Bonds) resulted in an increase of the yield on the bonds.  This not only make future debt more expensive but also makes servicing past debt more expensive.  The cost of the tax cut will not be $1.5T, it will be much more when all this increased interest is figured in.  We are making America weaker financially, not greater.

Trump campaigned that he was going to cut the corporate tax rate but also close loopholes, in particular, the carried interest break for hedge fund managers.  Not only did the tax reform not close any of the existing loopholes, but they created more with the pass through nonsense.

It absolutely defies economic logic to initiate increased deficit spending during a time of economic expansion.  Interest and inflation are very likely to result (nothing is for sure).  The middle class loses again.

All so likely true. The working class will get pounded.

Expect a weaker dollar as well, keeping fuel prices a nudge higher than they would otherwise be, plus higher interest costs for consumer debt, and its going to be tough when the slowdown actually comes on full force. This is a paper expansion from here on out.  The crash is gonna suck.

Re: I thought Republicans where fiscal conservative?
« Reply #31 on: February 13, 2018, 05:06:53 PM »

Offline Vermont Green

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One impact of the tax cut and subsequent spending increase is that this increased borrowing by the Government (in the form of issuing Treasury Bonds) resulted in an increase of the yield on the bonds.  This not only make future debt more expensive but also makes servicing past debt more expensive.  The cost of the tax cut will not be $1.5T, it will be much more when all this increased interest is figured in.  We are making America weaker financially, not greater.

Trump campaigned that he was going to cut the corporate tax rate but also close loopholes, in particular, the carried interest break for hedge fund managers.  Not only did the tax reform not close any of the existing loopholes, but they created more with the pass through nonsense.

It absolutely defies economic logic to initiate increased deficit spending during a time of economic expansion.  Interest and inflation are very likely to result (nothing is for sure).  The middle class loses again.

All so likely true. The working class will get pounded.

Expect a weaker dollar as well, keeping fuel prices a nudge higher than they would otherwise be, plus higher interest costs for consumer debt, and its going to be tough when the slowdown actually comes on full force. This is a paper expansion from here on out.  The crash is gonna suck.

Per Goldman Sachs CEO Lloyd Blankfein
Quote
The federal government's plan to increase spending in an already expanding economy while cutting $1.5 trillion in taxes isn't something Goldman Sachs CEO Lloyd Blankfein would have attempted.

"It wouldn't have been what I would do. I think it's a very bold thing to kind of throw a little bit more lighter fluid on a fire that was already going," Blankfein said during an interview Tuesday afternoon on Bloomberg television.

The concern is that the economy could get overheated, forcing the Federal Reserve, which is already raising rates, to act more quickly. That, in turn, could stall out the economy.

The tax cuts, enacted late last year, were pushed through with the assistance of some Goldman alumni, including Gary Cohn, the bank's former president who is now President Donald Trump's top economic advisor, and Steven Mnuchin, a former Goldman partner who is now Treasury Secretary.

The Trump administration is looking for the economy to expand even more than it has been, and if that is the case people will earn more money and pay more taxes, making the case for supply-side economics, Blankfein said.

Already, business conditions are improving, and the government can always reverse course if it needs to. "I think it's a risky thing. I probably wouldn't have done it," Blankfein said. "Do I think, 'crazy?' No. Wrong? We'll see."

Every one of Trump's economic advisers and most republicans in Congress (unfortunately I am sure some are too dumb to understand) understand this just as Blankfein describes it but damm the torpedoes, full steam ahead.  It is what the base wants to hear.

Re: I thought Republicans where fiscal conservative?
« Reply #32 on: February 13, 2018, 06:28:16 PM »

Offline Quetzalcoatl

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Goldman Sachs says that but then lobbies for Republicans and like half of Trump's staff is from there.  They want to have their cake and eat it too.

https://theintercept.com/2017/09/17/goldman-sachs-gary-cohn-donald-trump-administration/

The Republicans cause recessions every time they take office. Every policy they propose is a lie.  For instance, their "infrastructure plan" would actually cut infrastructure spending.  They are just saying it is $1.5 trillion because they're saying states will provide a big portion of the money, but they don't have any real plan to get it.  They're just asserting it so they can throw that number around. 
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Re: I thought Republicans where fiscal conservative?
« Reply #33 on: February 15, 2018, 09:23:08 AM »

Offline Vermont Green

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Trump is doing just what he said he would do, well almost.  He said he was going to cut taxes, increase defense spending and also increase infrastructure spending.  Of course he also said that he would not raise the debt because he was going to eliminate waste in government spending.  Who knew the economy could be so complicated?

Quote
Conservative think-tank weighs in

The Heritage Foundation, a notably conservative economic policy think tank in Washington, D.C., described the spending plans as unsound.

"It fails as sound fiscal policy," said Justin Bogie this week, the foundation's senior policy analyst in fiscal affairs, noting that just last year the Trump administration proposed balancing the federal budget within a decade.

"This proposal would add an additional $7 trillion to the national debt something not even a big spender like President Obama ever proposed," he said on the foundation's website.

Chief economist at Pantheon Macroeconomics, Ian Shepherdson, agreed, albeit in more scathing tones. The bipartisan budget package amounts to 0.7 percent of GDP on top of tax cuts of 0.5 percent of GDP, he observed. This when the economy is growing at near 3 percent is "crazy" and "the economy doesn't need it," he told CNBC.

"This is the dumbest thing the U.S. could possibly do," Shepherdson said of the spending bill. "Politicians are acting exclusively on re-elections and not on the effect of the real economy."

Spirits are high among U.S. consumers, many of whom saw a temporary boost to their wages as a result of the tax bill. But if the prominent economic forecasts are anything to go by, the current economic stimulus being enjoyed by both consumers and companies across America may come at a hefty price.
« Last Edit: February 15, 2018, 09:30:42 AM by Vermont Green »

Re: I thought Republicans where fiscal conservative?
« Reply #34 on: February 15, 2018, 09:54:36 AM »

Offline Donoghus

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Trump is doing just what he said he would do, well almost.  He said he was going to cut taxes, increase defense spending and also increase infrastructure spending.  Of course he also said that he would not raise the debt because he was going to eliminate waste in government spending.  Who knew the economy could be so complicated?

Quote
Conservative think-tank weighs in

The Heritage Foundation, a notably conservative economic policy think tank in Washington, D.C., described the spending plans as unsound.

"It fails as sound fiscal policy," said Justin Bogie this week, the foundation's senior policy analyst in fiscal affairs, noting that just last year the Trump administration proposed balancing the federal budget within a decade.

"This proposal would add an additional $7 trillion to the national debt something not even a big spender like President Obama ever proposed," he said on the foundation's website.

Chief economist at Pantheon Macroeconomics, Ian Shepherdson, agreed, albeit in more scathing tones. The bipartisan budget package amounts to 0.7 percent of GDP on top of tax cuts of 0.5 percent of GDP, he observed. This when the economy is growing at near 3 percent is "crazy" and "the economy doesn't need it," he told CNBC.

"This is the dumbest thing the U.S. could possibly do," Shepherdson said of the spending bill. "Politicians are acting exclusively on re-elections and not on the effect of the real economy."

Spirits are high among U.S. consumers, many of whom saw a temporary boost to their wages as a result of the tax bill. But if the prominent economic forecasts are anything to go by, the current economic stimulus being enjoyed by both consumers and companies across America may come at a hefty price.

If you're a Republican & you have the Heritage Foundation, of all things, trashing your ideas then you know its bad.


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Re: I thought Republicans where fiscal conservative?
« Reply #35 on: February 15, 2018, 10:13:03 AM »

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Here's how I'd summarize the Trump Administration and Republican-run Congress so far, in comparison to Reagan.

Similarities to Reagan:
Cut taxes, increase government spending, and increase public debt.

Differences from Reagan:
This President likes the Russians.
Inflation is now rising, not falling.

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Re: I thought Republicans where fiscal conservative?
« Reply #36 on: February 15, 2018, 10:20:55 AM »

Offline Donoghus

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Here's how I'd summarize the Trump Administration and Republican-run Congress so far, in comparison to Reagan.

Similarities to Reagan:
Cut taxes, increase government spending, and increase public debt.

Differences from Reagan:
This President likes the Russians.
Inflation is now rising, not falling.

I question whether this administration & Congress would have the tenacity to pass a TEFRA- like package when things start going south.


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Re: I thought Republicans where fiscal conservative?
« Reply #37 on: February 15, 2018, 11:22:06 AM »

Offline Quetzalcoatl

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Here's how I'd summarize the Trump Administration and Republican-run Congress so far, in comparison to Reagan.

Similarities to Reagan:
Cut taxes, increase government spending, and increase public debt.

Differences from Reagan:
This President likes the Russians.
Inflation is now rising, not falling.

You should add that Reagan never Tweeted out blame to the students at a school who were just targeted by a school shooting
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Re: I thought Republicans where fiscal conservative?
« Reply #38 on: February 15, 2018, 11:27:32 AM »

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Here's how I'd summarize the Trump Administration and Republican-run Congress so far, in comparison to Reagan.

Similarities to Reagan:
Cut taxes, increase government spending, and increase public debt.

Differences from Reagan:
This President likes the Russians.
Inflation is now rising, not falling.

I question whether this administration & Congress would have the tenacity to pass a TEFRA- like package when things start going south.

Absolutely not.

This could probably be said of both political parties (but for different reasons), but the Republicans in charge today are completely rudderless when it comes to principles:

1. Against stimulus during Obama years for purely political reasons (even though there was clear need for it).

2. For stimulus during Trump years for purely political reasons (even though there is no clear need for it).

3. Totally absent on "family values" when its politically expedient to be quiet (Roy Moore, Rob Portman, ripping DACA families apart).

4. No plan to address pressing social issues of our day: gun violence, opioid epidemic.

^^^I don't see any principle there except "play to our political base and our donors." And again, I think the lack of principle is a bi-partisan thing, but that certainly doesn't excuse it.


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Re: I thought Republicans where fiscal conservative?
« Reply #39 on: February 15, 2018, 12:15:03 PM »

Offline Vermont Green

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Comparisons to Reagan are interesting.  At the time Reagan, still had some reason to believe that trickle down economics would work.  It was somewhat of a new idea (probably not new to economics professionals but new to main street).  Now we know absolutely that trickle down principles lead to more debt, every time.  For the record, at the time, I did believe it and I voted for Reagan twice, but I watched and learned.

The other big thing is that the economy was in a recession so some level of debt-based stimulus did have some rationale behind it although I believe that most economic theory would say that this type of stimulus should only be used during a real crisis, like Obama faced.  Reagan faced kind of a crisis but not enough of a crisis to warrant the level of debt he accrued.

The main justification for Reagan's debt spending was that it allowed us to bankrupt the Soviet Union and win the Cold War, really without having to fire a shot (yes, I know there were rebel resistance activities in places like Afghanistan but we were not actively in a war like during the Bush years).  Reagan probably should not have cut taxes as much as he did.  We needed money to fund the cold war.  It is nonsense to think you can cut taxes and have less debt while funding a cold war.  I guess Trump was not paying attention to this.