Trump's Economy Still Unable to Rise above 3% Growth

That's what Keynesian economists claim, but there's no evidence to support their claim.

Recessions have one (or more) causes: structural unemployment, a reallocation of capital or a liquidity crisis.

An increase in spending will not resolve structural unemployment, nor will it prevent the reallocation of capital, nor will it effect liquidity, unless the spending is actually targeted at liquidity.

In the case of the Great Depression, the primary causes was structural unemployment, and it is disingenuous to peg the start to the 1930 Recession, when the 1925 Recession and the 1928 Recession preceded the 1930 Recession.

The introduction of electro-mechanical equipment and changes in manufacturing methods, namely from piece-meal production to assembly-line production generated unemployment, just as electric lathes, borers, grinders, planers, millers and drill presses did. One man operating an electric lathe could do the work of 8 men operating a manual lathe using a foot-treadle.

Government spending on the WPA did not resolve the structural unemployment. What did solve the problem -- only temporarily -- was war.

1936 $24.2 Million
1937 $46.1 Million
1938 $86.3 Million
1939 $143.7 Million
1940 $873.1 Million

Those are the revenues collected by the government solely for fees on war materiel export licenses. In other words, if you wanted to export anything classified by the government as "war materiel" you had to have a license which cost a nice fee. Consider that in 1940 the US government collected $6.5 Billion in revenues, so $873 Million is 13.5% of all revenues collected....just for licenses to export war materiel.

As soon as WW II ended, you went right back into a recession in 1946, again in 1949, and then three recessions during the Eisenhower Administration, with the last coming in 1960-1961.

The last three were the result of capital reallocation, and the first two structural unemployment.

Structural unemployment was resolved by sending Millions to university under the GI Bill, and then adapting military technology developed during WW II for civilian use (which led to the constant reallocation of capital during the 1950s and those three recessions).

The 1990-1991 Recession is an example of the effects of the reallocation of capital. President Bush called for the planned withdraw of the entire US VII Corps in Germany and corresponding reduction in troop strength, plus the withdraw of all tactical nuclear weapons. Both resulted in the cancellation of thousands of government and non-government contracts and resulting lay-offs of employees, and then additional problems as capital was reallocated from the Defense Industry to other sectors of the economy.

It takes 6 months to a year for the government to analyze economic data to determine where capital could be allocated, and by that time, the Free Market has already done it, as painfully as it might be, and in any event, the government has a poor track record for picking winners.

Obama's Stimulus Plan didn't work, because neither the construction industry nor public school teachers were the cause of the Great Recession, but the reallocation of capital outside the US was, and the industries hardest hit were manufacturing, especially export manufacturing.

Of course, government could attempt to prevent the reallocation of capital outside the US, but it may not be effective.

 

i agree to disagree. tax cut economics are worthless, if they don't pay for that policy.

 

You should consider the possibility that a mature advanced 4th Level Economy is incapable of growing in excess of 3%,

2nd Level Economies like China and Vietnam are growing at 8% to 12% annually precisely because they are transforming from an economy where 90% of the population is engaged in agriculture to an economy where 40%-50% of the population is engaged in manufacturing. The US grew at the same rates when it transformed, and emerging- and developing-States will also grow at the same rates.

There are reams of data on developing economies, but no data on a mature advanced 4th Level Economy where 70% of businesses are service or hospitality-oriented, instead of manufacturing-oriented.

We only have data for 18 years, and that's skewed by two recessions.

That's correct.

Actually, there were 474,000 jobs added in March, 471,000 jobs added in April, and 661,000 in May.

That's some nice propaganda and disinformation.

You totally ignored the fact that home sizes have tripled from 1,250 square feet to more than 4,000 square feet, so go back and recalculate using price per square foot to get a true and accurate measure of the real costs.

 

I think Keynesian economics works...but only sometimes. This is because of variables involved in an economy that moves into recession. So it is dependent of upon what sort of economic soup you are trying to address. In some cases, it works but not in all cases. I also think that in some cases supply side works, but not in all cases for the exact same reasons...the complexity of variables.

In so far as to keep capital here in the US instead of chasing after terribly cheap labor from the world's dirt poor? Well that would require a major shift in economic philosophy, somewhat of a regression in economic philosophy, which BTW helped to create history's largest ever middle class. Set a world record.

In short, the gov't by and for the People would look out first and foremost to the american people, the average american, when structuring economic law and policy. Which means NAFTA and others like it would never have been created. One reason the GOP saw that it was good under reagan and later bush, was that it served to bust up unions in america. And when clinton signed it, the unions were doomed and working amercans lost the right to collective bargain. But I digress...

 

Since Trump became President the market has gone up, corrected, and stabilized. What volatility ??

 

Tax cuts are a Keynesian stimulus.

 

The past 25 years before Obama saw many years of > 4% growth.

 

But results in fewer jobs. Too funny. That’s the D economic plan ??

 

I would think that any move that injects money into economic activity is a stimulus. The results should be logged down, over a time period, and a note should be made that it either acted as a stimulus or it did not. Then you would know not to try it again. Try something else.

 

At this time in history, we are at near full employment, have 6 million unfilled jobs, and have had a growing economy for several consecutive years. This is the time we should cut programs and spending necessary when the economy is not performing as well, and pay down debt. However, our legislators have chosen to add massively to the debt in order to cut taxes, mostly on corporations and the most wealthy among us. We've been told that 3% sustained growth or more will allow the tax cuts to pay for themselves, yet we aren't experiencing 3% sustained growth. We are also not expected to attain 3% sustained growth for many, many years. So, we've added substantially to the debt to provide tax cuts intended to stimulate economic growth, without actually achieving any more economic growth than we already were experiencing. Wages have been stagnate for a long time. We're at near full employment, and we are still not seeing adequate wage growth, but we are beginning to experiencing inflation. Fully half of the country is living on less than $50,000 a year, carrying more than $100K in debt, has less than $1000 in savings (including for retirement,) and are one major illness or injury away from bankruptcy. Too many are in fragile economic circumstances for the gamble made on the economy, but here we are.

The US hasn't gone 10 years without a recession. The last recession was in 2008…. so, if you do the math, you can see one is on the horizon for us. The FED has kept interest rates so low for so long, they have little, in the ways of tools, to fight any upcoming recession, and we now have lower federal income to support the economically vulnerable, when the next recession hits.

When you mention Obama's stimulus not helping, you're not considering what would have happened to the economy if we hadn't had that stimulus, or W's stimulus, for that matter. Seventy percent of our economy is consumer spending.

 

I think that open borders slave labor globalism is much to blame for the shape of the US economically when it comes to average americans. The elites seem to be doing really well. And I know this sounds marxist, class warfare. But that warfare was fought and won by the globalist elites and a complicit US gov't. The average american lost. And I cannot see it changing given both parties are neoliberal globalists.

 

It has.

 

The current economic model is now one of chronic underemployment, instead of chronic unemployment. There are plenty of jobs available, but they pay little. Part timers and gig economy workers can't demand higher wages.

 

What Is the Ideal GDP Growth Rate?

How Fast Should the Economy Grow?

What Output Growth Rate Should the Fed Target?

What is an ideal economic (GDP) growth rate?




The ideal rate is between 2-3 percent
Healthy Rate of Growth Is 2 Percent to 3 Percent
Economists agree the optimal GDP growth rate is greater than 2 percent but less than 4 percent.
Hence, in my opinion GDP growth rates of 2–4% in developed economies

https://www.thebalance.com/what-is-the-ideal-gdp-growth-rate-3306017
http://economistsview.typepad.com/economistsview/2007/01/what_output_gro.html
https://www.quora.com/What-is-an-ideal-economic-GDP-growth-raten

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Folks, if the ideal GDP growth rate is actually between 2-3 percent sustainable, why Trumpeteers are seeking a 4% and above?

Answer; For partisan reasons, and rat race mentality

Very retarded! and the main reason why I'm an independent

 

lol. January 2018. Only the right wing claims trade wars are good.

 

Trade wars, January 2018.

 

He is not seeking a "trade war"; one has been waged on the US for DECADES. He is making moves to END IT.

 

I live and work in a region where over 70% of the population voted for Trump, very conservative, Church goers.

State population; 760,000

......Today, our soybean farmers are very worried
......My Governor wants to protect a healthy trade surplus with Canada, BTW most States have a trade surplus with Canada
.....Annually, we have 2 million Canadian visitors spending an average of $400 a day
.....We have over 30 huge Canadian based firms employing thousands of workers

Thus, next time Trump visit my State, he'll get booed

 

there is no such word as economic demand. Lol

 

The market has been on the same upward trend for 9 years.

 

And then republicans ****ed up the economy, again, and here we are having to clean up after them again.

 

What trade wars ??

 

What trade wars ?? Where is the instability ???

 

There you go again disagreeing with yourself.