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

Second quarter will be DOOMSDAY for the desperate/downplaying/denying left.

What fun.

 

There you go again. Contradicting your posts showing that production always precedes consumption.

 

Too funny. More denial that production funds economic demand. Where does the money come from again ??

 

Your guy was taking credit for normal market volatility.

 

The D’s are running against economic growth claiming that identity politics, income inequality, immigration, and government spending & regulation is more important. The D’s used to be the party of American labor but now advocate illegal immigration which suppresses wages and jobs for American citizens.

 

you wish, right wingers.

 

What volatility ??

 

What is the D economic growth plan/platform ??

 

For your info, several entities are forecasting the GDP Growth/GDP Annual Growth, however, in an effort to discredit POTUS, the Dems will obviously advertise the lowest forecast, and in an effort to glorify POTUS, the Repubs will undoubtedly advertise the highest forecast.

Myself, I don't play retarded partisan games.....I wait until actual numbers are officially released.

 

Your quote: "His tax cuts were very beneficial and resulted in the largest amount of tax revenue in any 4 year period (adjusted for inflation and population growth)"

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In addition, Bush's $600 billion + supplemental spending have actually benefited the economy, and have significantly increased government revenues.

Agree or disagree?

 

No it is not ! As of May 30,2018 US GDP growth for the first quarter of 2018 has been revised downward to 2.2% from 2.3%.

https://www.cnbc.com/2018/05/30/second-reading-on-q1-2018-gdp.html

This is not exactly stellar - especially given that Trump has pumped 600 Billion in credit card spending (deficit increase) in the first half of the fiscal year (Oct 2017-Sept 201.

 

Quoted by gifteddone: This is not exactly stellar - especially given that Trump has pumped 600 Billion in credit card spending (deficit increase) in the first half of the fiscal year (Oct 2017-Sept 201.[/QUOTE]

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For your info, I've already warned a few BOZO's that on October 12th, Treasury will publish their Monthly Statement, and then, I will post actual numbers SINCE THE FULL IMPLEMENTATION OF TRUMP'S TAX CUTS, thus, from Jan 1st to Sep 30th, and then, the Repubs in this forum will disappear faster than Monika Lewinsky's lip gloss.

 

Rounding error.

 

It's Obama stellar.

 

Under 8 years of Bush - Total Military Spending increased from 300 Billion per year to over 900 Billion. Under 8 years of Obama this amount topped 1 Trillion.

Had we maintained 2000 spending levels (increasing with inflation) we could have diverted 500 Billion/year x 16 years = 8 Trillion dollars to infrastructure, technology, ramping up our economy to compete in the 3rd millennium.

Then you have this:

https://www.theguardian.com/commentisfree/2013/mar/11/us-public-defrauded-hidden-cost-iraq-war

So this amount is not even factored into the above.

While this contributed to the debt - Bush's tax cuts added even more to the debt.

Annual interest on our debt is roughly 450 Billion/year x 16 years and you can add another 7 Trillion to the above total.

So what do I think ? I think were fked. We now have a 21 Trillion dollar debt and it is expected to grow another Trillion per year through the rest of Trump's fiscal term.

The reason our annual payments are so low (essentially have been the same since 2000) is because of messing with the "invisible hand" to get ave interest rate on our debt from over 6% (the historical ave) down to 2.25%.

This was done by
1) Quantitative easing - buying our own debt. The Fed has roughly 4 Trillion which it has to float back on to the markets. This increases supply and decreases demand -(as the Fed is selling not buying/collecting) for a double whammy upward pressure on interest rates.

2) selling shorter term debt. Long term 30 year bonds have a higher yield (normally) than shorter term. When the 30 year was at 3% the 2 year was under 0.5%. The problem with this is that this debt - 2 yr, 5 yr, 10 yr has to be refloated when it comes due - in a much shorter period of time.

When that 2 year note - floated at 0.5% 2 years ago - has to be refloated today we now have to pay 2.5%. Yup - the 2 year has gone to 2.5%. A flattening yield curve (or inverted) is a sign of serious problems - lack of demand.

This is what happens when you try to mess with the invisible hand.

In addition to 1 and 2 - we are again running 1 Trillion dollar deficits which further increases the supply. This is problematic in a rising interest rate environment.

On the demand side things are equally grim

1) decreased demand due to lack of QE

2) After the 2008 crisis the global financial system was a mess - this kept demand for US debt strong ( the slowest sinking ship). Things in Europe are much better such that the competition for US debt is back - decreasing demand.

In addition - 10 years ago Chinese debt was not a serious consideration - that has changed and not only China but other industrializing nations.

3) Nations and various other financiers already overloaded with US paper - at some point it is prudent to diversify one's portfolio - God forbid one decides to sell some (increasing supply)

4) The US is now facing competition to the dollar as the sole world reserve currency.

Now I don't mean to blame this all on poor Bush. This mess started with Reagan - aka princess with a credit card.

The fact of the matter is that we are in a bad way. If ave interest rates on our debt were to rise by 2% (like the 2 year, 5 year, 10 yr notes that have to be refinanced) ... annual interest payments would nearly double - to 900 Billion/year.

If we were to get to historical ave (6%) and calculate on the basis of a debt of 24 Trillion (where it will be at the end of Trumps fiscal tenure) - this would be 1.44 Trillion dollars per year in interest payments.

Now ... we will not get to 6% prior to the end of Trumps term .. the point is to put things in perspective.

A ratio of interest to income hitting 30% sets off alarm bells at the IMF - the ship is taking in water faster than it can be bailed out.

Revenue is currently at 3.6 Trillion (assuming the economy keeps doing well).

1.44 Trillion/3.6 Trillion = 40% .. our ship has already sunk long ago. Now revenue will grow and ave interest will not hit 6% in the near future but, we could easily hit 3.5% = 840 Billion/year = 23.3% interest as a ratio of income.

This would put serious pressure on our economy and degrade investor confidence which puts more upward pressure on interest rates.

After the crash of 2008 revenue decreased from 2.7 Trillion down to 2.1 Trillion. This contributed 600 Billion to the 2009 deficit.

Should we have another economic issue (and these things happen on a regular basis) revenues can decline again

Should our revenue decline a similar percent to 2008 - down to 2.8 Trillion we would be at 30%.

Lets say we had a revenue decrease of half the above ... to 3.2 Trillion - deficits would again spiral up and the debt increase - at who knows what interest rates would increase the interest payments.

Some of my assumptions are not realistic over a 3 year time period .. I realize this. Over 10 years however they are very realistic.

Trump is following the same path as Reagan. After 8 years of Reagan and 4 years of Bush Sr. the interest on our debt exceeded 25%.

Its not that Clinton and the Republican congress wanted to show fiscal restraint - They had no choice. Clinton lucked out due to the internet and technology revolution (computer). Dow components now include Apple Intel and Microsoft. GE (the only remaining of the original Dow 30) was just kicked out. Revenue had a huge increase during Clinton's term which got us out of hot water.

There is no guarantee that we will get lucky and get bailed out the next time - a time that is coming to a theater near you soon.

 

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A warning from a demand side enthusiast. How did the Reagan, Clinton, and Bush 43 economies go when supply side policies were implemented ?? Reagan had a year of ~ 8% gdp growth and a month in which 1,000,000* jobs were created.

 

Government spending contributed to the debt. The supply side policies grew the economy. Reagan's military spending enabled Clinton to cut military spending and helped achieve the budget surpluses 25% of which were the result of increased cap gains tax revenue due to the Clinton cap gains income tax cut.

Obama added $10T to the national debt.

 

There was nothing stellar about the economy under Obama. Well ... I suppose one could say it was stellar in comparison to the mess he was handed but, once the economy recovered from the crash .. Obama did little to improve things.

Trump is doing more than Obama on some fronts (his moves with regulations have helped) but mostly Trumps moves window dressing for political purposes. He has not really addressed some of the systemic issues. At the same time he is engaging in massive deficit spending which is a huge negative. What is worse is that this deficit spending is not targeted to the right places.

 

The only way to reduce the debt is to grow the economy and supply side policies will accomplish that. Government spending is purely political. Supply side policies cannot force politicians to be responsible when almost all of them are more interested in reelection than the good of the American people. Obama's command/control economic policies resulted in pathetic economic growth and ballooning national debt. The only comprehensive plan that I've seen that addresses both growth and spending over a long term period of time (decades) is the original Paul Ryan Roadmap.

 

You are repeating myth engaging in historical revisionism. The economy grew due to some well known factors.

1) the baby boomers moving into their high spending years (starting around 1983) - they are now moving into their low spending years which is creating a drag.

2) The internet/computer technological revolution. Apple, Intel, Microsoft are now part of the Dow 30 - GE was just kicked off ( the only one left of the original Dow 30). For the first time in a long time we had "Made in USA" products (well made in China but by US companies) being sold all over the world.

The business cycle is the business cycle - in the beginning demand outstrips supply and profit margins are high. During maturation profit margins stagnate as supply equals demand and competition springs up. We are now entering the end of the maturation phase. In the next phase supply outstrips demand and profit margins plummet . Same thing happened with Televisions and computers.

I can go on but - you saying "supply side policies grew the economy" without justification of this claim - does not equate to much.

The fact of the matter is that after 8 years of Reagan and 4 years of Bush Sr. - despite growing revenue - we reached a debt situation where interest payments as a ratio of income hit 25%.

Wages have stagnated and the cost of living is way higher than "stated" inflation (CPI) suggests - due to removing energy and food from the calculation.

Back in the 50s/60s if one had a job at Sears one could afford a home a car and your wife did not have to work. It is no secret that "something has changed".

In addition to Gov't debt, consumer debt is off the charts.

Consumer spending is the largest portion of the economy.

Last - you should quit citing false figures that have already shown to you to be false. Obama contributed roughly 8 Billion dollars to the debt .. most of which was in the first 4 fiscal years and much of that debt was due to the crash that happened under Bush's watch.

This is not to say that Obama was some economic hero - he wasn't - not by any stretch of the imagination. Obama did nothing to deal with our systemic spending issues related to Total Military Spending and Healthcare spending but, I like to shoot my arrows straight.

These are serious issues and partisan name calling and living in some historical revisionist fantasy and misappropriation of blame will not help but, that is pretty much all we get from the MSM and much of talk radio so it is understandable that so many quote this propaganda like it has some basis in fact.

 

1) Reducing the debt ? are you kidding me. We need to reduce the deficit before we can even begin go think about reducing the debt. Reducing the deficit means - reducing the deficit = not spending more than our income. It does not matter how much the economy is growing - so long as deficits exist the debt can not be paid .. So long as politicians spend way more than our income ... the debt can not be reduced.

2) How will supply side policies grow the economy ? Reagan made this same claim - as did the Bush's and all we got was a bunch more debt.

True - and never more so than with Trump.

I have no idea what you mean by "command and control economic policies" and I have never read Paul Ryan's road map so I have no comment.

When I talk about things related to the economy I do not talk in "Platitudes or meaningless labels". I point to specific economic issues.

 

There’s no myth concerning the growth realized under supply side economic policies. And the stagnation under the command/control economics of Obama.

Blaming Bush is a favorite pastime of illiberal regressives.

 

You are uninformed about economic issues. Do some homework.

 

And once again you completely fail to explain how supply side economic policies benefited our economy - following with some demonization of the messenger because you can not handle - but have no coherent response - to the message.

 

I am quite informed - It is not me who runs around crying "your uninformed - do some homework" rather than responding to the content of the message with something coherent.

You can not even explain the terms you use. Running around crying "supply side economics" while not giving one example of how supply side benefited our economy is as lame as it gets.... and then calling me "uninformed".