75% of the public says the US economy is doing poorly. 75% of the public says that they, personally, are doing quite well, "thriving".
Hillary Clinton win = what for the economy?
- Thread starter marcoPolo21
- Start date
I don't think so, but we can disagree without being disagreeable. Under Clinton I would expect about 2% steady growth to a maximum of about 3%, while deficits continue to decline and we approach a balanced budget. I would expect government spending to increase in the areas of infrastructure, job stimulus, and education while the Defense budget would be held more less in check, and perhaps even decline a little in discounted dollars.
Under Trump, on the other hand, and assuming he gets a Republican Senate, I would expect greater GDP growth fueled by government handouts to business and defense contractors and deficits growing at a rapid pace. But Trump won't have a clue. This will be driven by the supply-siders in the Republican economic advisement corps which consists, sadly, of too many hack economists of the Wendy Gramm sort. These folks insist on applying both the good and bad of the Hayek-Friedman school (both great economists) with emphasis on the parts proven wrong.
Under Trump, I think we would see more or less a repeat of the failed supply-side economics of the Reagan era that has contributed mightily to undesirable long term effects, such as a lopsided wealth distribution and a much weakened middle class. Reagan's administration produced huge economic growth and a lot of spending on wasting assets, i.e.,defense. During that time we transitioned from the world's largest creditor nation to the world's largest debtor nation. Reagan himself said the monstrous debts created by over the top Keynesian stimulus [my words of course] were his greatest disappointment. Which is another way of saying spending the additional revenue expected to result from large, upper bracket tax cuts before it materialized was a big mistake. [Friedrich Hayek had something to say about that!] In fact this period has been studied ad nauseum by economists. Revenues declined due to the tax cuts, and quickly, but this effect was outstripped by a delayed increase in revenues from stimulus induced by government spending. Just as in the more properly applied demand side stimulus, the increased revenue that results from all that additional spending couldn't keep up with the debt that results. But in the case of the Reagan supply-side stimulus, the debts were truly monstrous! and could not be readily paid down once the economy was hitting on all cylinders again. (An important contributing factor was the high interest rate in effect when Reagan took office, due to Volcker's raising of the Fed Funds rate.) Reagan left a huge debt load for his V.P. to deal with in the subsequent administration.
Incidentally, Reagan apparently didn't know that their supply-side stimulus was just an inept version Keynesian economic stimulus used to ameliorate the effect of a recession. (Recall that Reagan took office in a recession induced by Volcker's intentional pushing of interest rates way up to counter Carter era stagflation.) Normally Keynesian stimulus is applied on the demand side; not the supply side. Galbraith and his chums joked about how Reagan applied "involuntary" Keynesian stimulus without even realizing it.
If Trump is elected we can look forward to more reckless 'supply-side' stimulus. It works like maxing out your credit cards works: you live high on the hog for a time, then the bills come. On the other hand, the global economy is still in the process of emerging from the great recession, if we keep a steady course we'll be fine.
The proper way to shorten a recession is with demand side stimulus, as this works just as well as supply-side to ameliorate the effect of recession, but avoids long-term damaging economic fallout. Probably the Reagan debt was due more to excessive stimulus, i.e., spending, than applying supply-side rather than demand side stimulus. Either mode of stimulus in excess will produce excessive debt. But the real disadvantage of supply-side stimulus is the long term damage it can inflict on the economy through secondary effects. Also the often heard claim that it produces more jobs is highly suspect (see the Kaufman Foundation studies.)
When demand-side stimulus is applied wisely it can produce not only job growth that should easily outstrip what is achievable with supply side stimulus, but also produce investment in appreciating assets that will over the years more than pay for themselves. This is how you grow an economy. We are not going to get this with a Trump administration.
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A good summary of arguments that have been made here for years. Doomed to be ignored or denied again I'd wager.
One quibble: the proper way to shorten a "balance sheet" recession, aka demand side recession, is with demand side stimulus. This matters because you have mentioned a supply side recession yourself here.
Hellary... what for the economy?
IRRELEVANT!
Hellary cares only about MONEY and POWER. Nothing else. She's a narcissist psychopath. (As is Odumbo, BTW.) She cares not about "America" or our people.
Anyone who doesn't "get that", hasn't been paying attention.
IRRELEVANT!
Hellary cares only about MONEY and POWER. Nothing else. She's a narcissist psychopath. (As is Odumbo, BTW.) She cares not about "America" or our people.
Anyone who doesn't "get that", hasn't been paying attention.
I probably wrote something ineptly. Not unusual for me. I think in terms of supply-side stimulus versus demand side stimulus. And I'm a bit confused by the expression 'supply-side recession'. Did I write that? Despite my admiration for the two great economists Hayek and Friedman, it seems the debate should be over by now. Nevertheless, their ideas, or the misinterpretation of them, that have proved wrong or unfruitful in practice, somehow refuse to die. This observation was behind the title of John Quiggin's (The Australian economist) brilliant little book, "Zombie Economics".
I appreciate your post and explanation of economic theories. Your post is also an example of why the average guy in the street just has their eyes glaze over when debating all of this. The guy in the street wants to know one thing and one thing only. Does this get me a job? Period, that's it.
I agree that a massive infrastructure rebuild will stimulate the economy. It will require a tax to finance it, and there's the rub. You say tax and the republicans have their knee jerk response. tax bad, very bad. The dems have their knee jerk response. Tax good, more to steal and enrich ourselves. To be fair the repubs love to steal tax dollars as well.
This only works if it is presented properly and the tax dollars aren't funneled into the general fund scam. You simply tell the people, you want a job or not. Yeah, it's going to cost you a couple percent off the top, but you'll have a job, a really good job. Hardhats understand this philosophy. You pay some, you get some. They also need to be told that this isn't just construction, it's also manufacturing which will get a boost. Steel industry will boom and that mean all those smaller shops that provide service to big steel will thrive. Everyone got themselves a good job, their spending, it all flows through the entire economy. Simple as this is to understand I don't expect the stupid fucks in DC to be able to explain it.
The next aspect is the difficult part. It will require all of the crooks in DC to keep their hands off the money. Every penny of this new tax needs to be separate from everything else. No general fund scam. No way for them to funnel it to other places. Anyone caught doing that should be executed immediately. (Unlikely, so I'll settle for being thrown out of office) The entire project needs independent oversight and constant third party monitoring. Not some fucking committee of politicians. Independent contractors. It also requires a mandate that all steel, all equipment, everything, and I mean every single thing right down to the nuts and bolts, all of it manufactured in the United States. Not just a US company making it overseas, no that won't do. Has to be made right here on US soil. All of it, no exceptions. Will that drive up the cost? yes. Who gives a fuck, we're financing the whole thing anyway.
Do this and the economy booms. Don't and we drag along, Wall Street does well, the rich get richer and the rest trudge the road, and are told to fund a 401K that is meaningless to them because they're not making enough money to fund anything. Don't get me started on the 401K scam.
Do I expect this to be implemented by either of the nitwits running for office. Absolutely not. It's too simple. We'll continue to discuss economic theory like the ones you presented and nothing will improve for the working man and woman. But hey, Hillary will give'em a worthless collage degree and shitty healthcare that is unaffordable. What will Trump deliver? Who knows, but it might be fun to watch. I'm going for the entertainment value.
There are a number of flaws in your post and I don't have time to address them all so lets just touch on the opening thoughts. You've proven to be totally behind on relevant news and this is just another example. There is no way the most war hawkish candidate in in recent history is going to "hold in check" or reduce the defense budget. Utterly laughable..
Here are some liberal sources for you if you are oblivious enough to doubt she is hawkish:
http://www.nytimes.com/2016/04/24/magazine/how-hillary-clinton-became-a-hawk.html
http://www.salon.com/2016/04/27/dem...ght_shes_a_bigger_hawk_than_the_republicanse/
Hellary for president? She's already said, "as president, I'll give them damned Russians what for!" If Putin flips his lid, he has the potential to destroy all life in America. Perhaps that should be considered in all dealings with him/Russia.
Ever hear of "don't poke the big dog with a stick"?
A good, well thought out summary. I agree with some points and disagree with others. It is excellent to see some in-depth polite debate on P&R rather than the usual slinging of mud.