Trump Economy adds 266,000 jobs in November

[civilwarbuff]

This post might even be more wrong than the last one. It's kind of staggering, really.

Where do you think money goes when the government spends it? Do you think it just vanishes?

Governments do not create wealth, people do....

 

[civilwarbuff]

Actually in reality those giant 2009-2011 deficits were in a not small, but a significant portion, from tax cuts! Both more spending and tax cuts. Together.

Like now. Like 2019.

We could find out the precise ratio for you if it is of interest. (is it?) (I like tax cuts as a stimulus; as you can see above though, I don't think we need a big stimulus during a strong economy, and I think we will pay in part for these new bigger deficits, these news ones today in 2019, later in time)

Those were Bush's tax cuts that he actually just extended....

 

[JosephZ]

Every time I hear this, I laugh and am amazed people still believe this Democratic byline.

The worst recovery EVER from a recession and Trump wants to ride those coattails.....How hillarous is that.....?

All you had to do is reverse the majority of Obama's regulations and business plans, reverse the taxes Obama approved for business and viola - jobs came back, the economy came back.

Can you see the trend that was occurring years before Trump took office?

It should be clear to anyone that Trump inherited an improving job market from the previous administration.

If you take a look at the stock market you will notice the current trend continues from the from the previous administration.

How can anyone say that the Trump administration didn't inherit an improving economy and is currently riding on the previous administrations success in turning things around by looking at the above charts and others related to the economy?

 

[iluvatar5150]

Governments do not create wealth, people do....

Also incorrect (just look at the UAE as an obvious example), but that doesn't answer my question.

 

[civilwarbuff]

Where do you think money goes when the government spends it? Do you think it just vanishes?

Almost....since government jobs are not self-sustaining. Stop taxing and those jobs go away because they have no product or service to sell.

 

[civilwarbuff]

Can you see the trend that was occurring years before Trump took office?

Can you see that it took 8 years? Most recoveries take 2 years or less....

 

[Halbhh]

Those were Bush's tax cuts that he actually just extended....

You know, to me, I kinda thought -- really -- that Bush's tax cuts were a continuation, extension of Reagan's. I felt he was copying Reagan.

And, well wasn't Reagan really doing what Kennedy started?

(yes, he was)

Where will it end? heh heh. Just being humorous, really. Who invented the idea of significant tax cuts? That might be interesting.

But I already know who invented the idea that deficit spending is a good stimulus during economic downturns. That's largely Keynes.
John Maynard Keynes - Wikipedia

(heh heh, maybe someone will tell me it wasn't Keynes, but Irving Fisher, lol. Or how about someone earlier. This could be fun)

 

[iluvatar5150]

Almost....since government jobs are not self-sustaining. Stop taxing and those jobs go away because they have no product or service to sell.

Also sort of incorrect, but that still doesn't answer the question of where the money goes. To recap, you said:

But remember Trumps deficits included a 'YUGE' tax cut returning money to the people and businesses that get taxed so that money doesn't just disappear....Obama just simply spent his way into deficits.

...which implies that tax cuts go into the economy while government spending just vanishes into some place other than the economy.

Is that what you're arguing? Because if so, that's preposterous. Whether or not a government job is "self-sustaining" has nothing to do with where the money goes. The money still gets paid to people (mostly in the US) - people who participate in the rest of the US economy. Whether the government pays somebody $1000 for a week of work or gives them a $1000 tax cut, the money still gets back into the economy.

 

[iluvatar5150]

Can you see that it took 8 years? Most recoveries take 2 years or less....

This was a lot worse than most recessions.

 

[civilwarbuff]

You know, to me, I kinda thought -- really -- that Bush's tax cuts were a continuation, extension of Reagan's. I felt he was copying Reagan.

And, well wasn't Reagan really doing what Kennedy started?

(yes, he was)

Where will it end? heh heh. Just being humorous, really. Who invented the idea of significant tax cuts? That might be interesting.

But I already know who invented the idea that deficit spending is a good stimulus during economic downturns. That's largely Keynes.
John Maynard Keynes - Wikipedia

(heh heh, maybe someone will tell me it wasn't Keynes, but Irving Fisher, lol. Or how about someone earlier. This could be fun)

If you really want to start at the beginning 'Wealth of Nations' is a must read.....

 

[civilwarbuff]

Also sort of incorrect, but that still doesn't answer the question of where the money goes. To recap, you said:



...which implies that tax cuts go into the economy while government spending just vanishes into some place other than the economy.

Is that what you're arguing? Because if so, that's preposterous. Whether or not a government job is "self-sustaining" has nothing to do with where the money goes. The money still gets paid to people (mostly in the US) - people who participate in the rest of the US economy. Whether the government pays somebody $1000 for a week of work or gives them a $1000 tax cut, the money still gets back into the economy.

What I am trying to point out (and doing a poor job of it) is that government spending does little positive good for the economy. It is a one shot deal then it is gone....until the next stimulus which simply increases either taxes or deficits or both. Whereas tax cuts stay with people on a payday basis until the government takes them away again. It is the only true long term stimulus to the economy.

 

[Halbhh]

If you really want to start at the beginning 'Wealth of Nations' is a must read.....

I wondered whether I should go to Adam Smith, but thought I'd be overdoing it.

I got curious about Smith precursors, and if you like Austrian School stuff (I bet you do):
Before Adam Smith There Was Chydenius | Gary Galles

I wonder, is it interesting to you that the big modern era tax cutter get-the-ball-rolling was Kennedy the 'liberal'?

 

[JosephZ]

Can you see that it took 8 years? Most recoveries take 2 years or less...

The point is that Trump has only been president for 2½ years or so of a decade-long economic recovery and expansion and this has occurred despite Trump being president, not because he became the president.

 

[iluvatar5150]

What I am trying to point out (and doing a poor job of it) is that government spending does little positive good for the economy. It is a one shot deal then it is gone....until the next stimulus which simply increases either taxes or deficits or both. Whereas tax cuts stay with people on a payday basis until the government takes them away again. It is the only true long term stimulus to the economy.

Ok, if that's your point, it's much clearer, but it's still wrong. What you're talking about is a fiscal multiplier, which is, essentially, the amount of economic activity generated by a given amount of government spending (which includes both tax cuts and actual outlays).

Every estimate I've ever seen (including this one from the CBO (pg 11)) puts the fiscal multiplier for spending programs as being greater than the multiplier for tax cuts. While the success of a given program (i.e. the magnitude of the multiplier) depends on exactly who receives a tax cut or what is purchased with the money, the gist is that giving money (whether it's via tax cuts or expenditures) to poor people is more effective than giving money to wealthy people and that spending money is more effective than cutting taxes.

 

[civilwarbuff]

I wonder, is it interesting to you that the big modern era tax cutter get-the-ball-rolling was Kennedy the 'liberal'?

Actually, it is....and given the tax situation it was the correct thing to do. Is it interesting to you that in the early part of the Great Depression the Republican Hoover increased taxes?

 

[Halbhh]

Actually, it is....and given the tax situation it was the correct thing to do. Is it interesting to you that in the early part of the Great Depression the Republican Hoover increased taxes?

Oh, sure, they did what we learned are the classic mistakes (both the federal spending attempting austerity to balance the budget on the one hand, and the Federal reserve policy on the other, both) to do when there is a big bubble collapse, so that the collapse overshot past the speculative bubble and ate into the normal economy deeply. It would be like....having overgrowth in a forest burn, naturally, but then not fighting the fire when it comes into the city(!) -- a serious mistake.

It's fine to let the overgrowth out in nature burn naturally, but the smart manager prepares a fire line to protect all the homes at the edge of town (if they can!).

 

[Halbhh]

Ok, if that's your point, it's much clearer, but it's still wrong. What you're talking about is a fiscal multiplier, which is, essentially, the amount of economic activity generated by a given amount of government spending (which includes both tax cuts and actual outlays).

Every estimate I've ever seen (including this one from the CBO (pg 11)) puts the fiscal multiplier for spending programs as being greater than the multiplier for tax cuts. While the success of a given program (i.e. the magnitude of the multiplier) depends on exactly who receives a tax cut or what is purchased with the money, the gist is that giving money (whether it's via tax cuts or expenditures) to poor people is more effective than giving money to wealthy people and that spending money is more effective than cutting taxes.

Right. But this generally depends on the capacity utilization, rate of unemployment/underemployment vs the natural rate (of job turnover), and such, I understand. The multiplier is better when there is slack in the economy. Right? If you've read it carefully, you could aid about the current situation, and save me time, as I've not reviewed that kind of thing lately.

 

[iluvatar5150]

Right. But this generally depends on the capacity utilization, rate of unemployment/underemployment vs the natural rate (of job turnover), and such, I understand. The multiplier is better when there is slack in the economy. Right? If you've read it carefully, you could aid about the current situation, and save me time, as I've not reviewed that kind of thing lately.

I'm not making any claims about specific multipliers, just that those for spending programs tend to be higher than those for tax cuts and that those for assistance to poor people tend to be higher than those for assistance to wealthy people.