Make America's deficits great again

[GMDino]

* OPINION PIECE

https://thehill.com/opinion/finance/452045-make-americas-deficits-great-again

Quote:Two and a half years into his term, President Trump has little to show for breaking with erstwhile Republican Party orthodoxy on trade and budget policy.



Indeed, far from delivering on his promise to cut America’s trade deficit, Trump has presided over a ballooning deficit that’s on pace to be some 25 percent higher than when he took office. This is happening at a time when the budget deficit is widening and the country’s public debt is well on its way to exceeding 90 percent of GDP.


Sadly, the Trump administration seems unfazed by the country’s deteriorating long-run financial position. It shows no indication of correcting policy course to put the economy on a sounder long-run economic footing. This makes it all too likely that the country’s incipient twin deficit problem will only worsen in the remaining 18 months of Trump’s first term. That in turn will further mortgage the country’s economic future and diminish the U.S. dollar’s attractiveness as an international reserve currency.

Two defining pillars of the Trump administration’s macroeconomic policy have flown in the face of pre-Trump-era Republican Party orthodoxy.


The first involved the ready resort to import tariffs and the repeated calls for a weak dollar with the supposed intention of leveling the international playing field and eliminating the trade deficit. 


The second involved the introduction in 2017, a time of relative economic strength, of a massive unfunded tax cut centered on a large reduction in the corporate tax rate. This budget-busting tax cut gave short shrift to earlier Republican Party strictures that budget deficits mattered and that a rising public debt effectively mortgaged our children’s future. The supposed intent of the Trump tax cut was to spur corporate investment as a means to put the country on a faster growth track.  


Needless to say, it is far too early to make a definitive assessment of the major shift in U.S. trade and budget policy on Trump’s watch. But the initial indications give reason for considerable concern.


Far from strengthening the country’s external accounts, the Trump import tariffs and budget largesse are doing the reverse, as indicated by a widening U.S. trade deficit.

The import tariffs are doing so by raising the prospect of a world trade war, by sowing economic uncertainty in our trade partners and by contributing to a generalized economic slowdown abroad. That in turn is inducing our trade partners to demand less of our exports and to loosen their monetary policies. By causing the dollar to appreciate, that relative monetary policy loosening worsens the international competitive position of our exporters in foreign markets.


For its part, our widening budget deficit is damaging our external position by reducing the country’s saving level. That perpetuates a situation whereby the U.S. continues to consume more than it produces, thereby forcing it to import more than it exports.


If the Trump import tariff and budget policy has weakened our external position, the Trump budget stimulus has seriously undermined our long-run public finances. And it has done so without delivering the promised investment boom that was supposed to put our economy on a very much faster growth path than that experienced over the past decade.


According to the independent Congressional Budget Office (CBO), even on optimistic assumptions regarding economic growth, over the next decade the Trump tax cuts will result in an increase in the U.S. budget deficit to an average 4.25 percent of GDP. That would be up from an average of less than 3 percent of GDP over the preceding fifty years. The CBO estimates that those deficits will result in a disturbing rise in the public debt-to-GDP ratio from 78 percent at present to 92 percent by 2029.


An undisciplined budget policy at a time of economic strength limits the scope for fiscal policy support at a time of economic weakness.

This could prove to be particularly unfortunate at a time that already-low interest rates limit the amount of support that the Federal Reserve might be able to provide the economy in the event of an economic downturn. As a result, it could mean that our next economic recession will prove to be more pronounced than need be.
The Trump administration is not known for introspection or for drawing the right lessons from past economic policy disappointments. We should therefore reconcile ourselves to the dismal prospect of having to live with growing twin budget and trade deficit problems.


Desmond Lachman is a resident fellow at the American Enterprise Institute. He was formerly a deputy director in the International Monetary Fund's Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney.

[GMDino]

The tax cuts did not pay for themselves.

The cut for you (universal) and me will expire while Trump's is permanent.

The tax cuts did not spur long term investment.

Personal debt is soaring.

The deficit is growing.

And, on top of that, cuts to the IRS budget have resulted in collecting less also.

MAGA?

https://www.usatoday.com/story/news/politics/2019/08/15/irs-cuts-cause-us-government-lose-billions-taxes-report-says/2009894001/

Quote:The federal government could have collected $34.3 billion more in taxes from the nation’s largest corporations by increasing IRS resources by less than half that amount, according to a new study.


That’s nearly 20% of the estimated gap between what corporations paid in taxes and what they owed from 2002 through 2014.


The report from the Indiana University Kelley School of Business is the first to quantify the amount of corporate tax revenue lost during the audit process for every dollar of IRS budget cuts, according to the school.


The number of federal tax examiners has declined by about one third since 2010.


“The scope of the audits is substantially reduced,” said Casey Schwab, an associate professor of accounting at the business school. “While the IRS appears to still target the most aggressive positions, they can’t audit as many positions within the return. They just don’t have the resources.”

Researchers looked at confidential IRS audit data from large, publicly-traded corporations for tax returns years 2000 through 2010. They estimated the government could have collected an additional $34.3 billion in taxes from those filings if they’d had $13.7 billion in additional resources.


And that estimate of lost revenue is potentially only a fraction of what the amount would have been if the study had included audit data from other businesses, individuals and foreign taxpayers.

Changes in IRS funding, however, are most likely to affect the corporate audit rate.


And researchers wanted to see how the IRS used its reduced resources on the audits they did conduct.

They concluded that when resources decline, the IRS finds fewer potential discrepancies and challenges a smaller amount of tax savings.


The IRS does, however, collect a greater proportion of the unpaid taxes it challenges. That could mean that, with fewer resources, auditors are concentrating on the discrepancies that are harder for taxpayers to defend.


“The results suggest that they’re focusing their efforts on the weakest positions and the ones they think they can get the most bang for the buck all the way through the collection,” said Bridget Stomberg, an associate professor of accounting at the Kelley School of Business.


The IRS’s budget has been targeted in recent years for various reasons. Some who’ve advocated for the cuts argue that they force the IRS to become more efficient and to focus on core responsibilities. But some critics of the cuts say they’re a politically motivated response to such actions as the IRS’ scrutiny of conservative group’s applications for tax-exempt status.


The report’s authors said the IRS is more efficient than the tax collection agencies of other developed countries, spending less on average in administration costs for the amount of revenue collected.


Still, the Tax Policy Center has estimated that the federal government failed to collect $41 billion in corporate taxes from 2008 through 2010.


If corporations are paying less taxes, Schwab said, that could potentially boost the economy.



“On the other hand,” he said, “there’s a notion that everyone should pay their fair share.”

It's almost like the guy who couldn't make money running a casino because he spent more than it could take in doesn't know how to handle money.  Almost.

[Arturo Bandini]

(08-15-2019, 11:00 AM)GMDino Wrote: The tax cuts did not pay for themselves.

The cut for you (universal) and me will expire while Trump's is permanent.

The tax cuts did not spur long term investment.

Personal debt is soaring.

The deficit is growing.

And, on top of that, cuts to the IRS budget have resulted in collecting less also.

MAGA?

https://www.usatoday.com/story/news/politics/2019/08/15/irs-cuts-cause-us-government-lose-billions-taxes-report-says/2009894001/


It's almost like the guy who couldn't make money running a casino because he spent more than it could take in doesn't know how to handle money.  Almost.

Because he didn't have to earn any.

I think I'll could do fine if I inherited 500 millions dollars.

[GMDino]

The US budget deficit widened to $1.067 trillion for the first 11 months of the fiscal year, the Treasury Department reported. The last time the gap was that big was in 2012, in the aftermath of the financial crisis.https://t.co/SBL8ATo9SS

— Jake Tapper (@jaketapper) September 12, 2019

 

[GMDino]

In other news in the vein of "how can they impeach a president who is so great?!?!"

https://thehill.com/policy/finance/464764-federal-deficit-estimated-at-984b-highest-in-seven-years

Quote:Federal deficit estimated at $984B, highest in seven years



The federal budget deficit for 2019 is estimated at $984 billion, a hefty 4.7 percent of gross domestic product (GDP) and the highest since 2012, the Congressional Budget Office (CBO) said on Monday.



The difference between federal spending and revenue has only ever exceeded $1 trillion four times, in the period immediately following the global financial crisis.


The deficit, which has grown every year since 2015, is $205 billion higher than it was in 2018, a jump of 26 percent.


The CBO has warned that the nation's debt is on an unsustainable path. Higher levels of debt increase borrowing costs, make it harder for the government to battle economic downturns and increase the share of future spending devoted to paying off interest costs.


Since President Trump took office, the GOP has passed a massive tax cut package that reduced revenue, while Democrats and Republicans have agreed to increase spending year after year.


Budget watchers note that the main drivers of the deficit, however, come from automatic spending programs such as Social Security, Medicare and Medicaid.


"Democrats and Republicans must be held responsible for the outrageous deficit reported today by the CBO," said Jason Pye, vice president of legislative affairs at the conservative advocacy group FreedomWorks.


"This unsustainable situation is only going to get worse," he added.


The final Treasury Department figures for the fiscal year, which ended on Sept. 30, will be published later this month and could include worse news.

Previous Treasury estimates projected the deficit for the year surpassing $1 trillion.

[fredtoast]

Deficit spending is necessary in certain situations.

But it is also necessary to cut the deficit when the economy is "the greatest in any history"

How the hell can we be running a deficit when the economy is on fire?

[Benton]

(10-08-2019, 01:07 PM)fredtoast Wrote: Deficit spending is necessary in certain situations.

But it is also necessary to cut the deficit when the economy is "the greatest in any history"

How the hell can we be running a deficit when the economy is on fire?

Wars on multiple fronts while cutting taxes to big businesses and upper classes.

Or was that rhetorical?

[GMDino]

I should probably fact check this first...but it seems right.  

Looking at jobs and deficits

Reagan: 15M jobs
$79B to $159B

Bush: 2M jobs
$153B to $255B

Clinton: 23M jobs
$255B to $128B surplus

Bush 1.5M jobs
$128B surplus to $1T debt

Obama 12M jobs
1.16T to $585B

Trump 5M jobs
$585B to $1.1T

Hate for this to go viral#TrumpMinneapolis

— ️?? Christopher Zullo (@ChrisJZullo) October 10, 2019

 

[GMDino]

Maybe he's just not good with numbers?

Does he know how many States are in the Union? Uhm...never mind https://t.co/RTojDUQr3N

— David Valcin (@filthymcnasty) November 15, 2019

 

[BakertheBeast]

(08-15-2019, 11:00 AM)GMDino Wrote: The tax cuts did not pay for themselves.

The cut for you (universal) and me will expire while Trump's is permanent.

The tax cuts did not spur long term investment.

Personal debt is soaring.

The deficit is growing.

And, on top of that, cuts to the IRS budget have resulted in collecting less also.

MAGA?

https://www.usatoday.com/story/news/politics/2019/08/15/irs-cuts-cause-us-government-lose-billions-taxes-report-says/2009894001/


It's almost like the guy who couldn't make money running a casino because he spent more than it could take in doesn't know how to handle money.  Almost.

Does anyone actually believe {aside from his Trumpsters), that Trump came up with all these plans to benefit the rich on his own?  He is too stupid.
There are other individuals pulling his strings.
Tax cut for the rich and corp. permanent.
Tax cut (minimal) for the rest of us to expire. Say what. Why? Doesn't that raise a red flag or bother anyone?
How people can vote against their own interest is beyond me.

[CJD]

(10-10-2019, 09:30 PM)GMDino Wrote: I should probably fact check this first...but it seems right.  

Looking at jobs and deficits

Reagan: 15M jobs
$79B to $159B

Bush: 2M jobs
$153B to $255B

Clinton: 23M jobs
$255B to $128B surplus

Bush 1.5M jobs
$128B surplus to $1T debt

Obama 12M jobs
1.16T to $585B

Trump 5M jobs
$585B to $1.1T

Hate for this to go viral#TrumpMinneapolis

— ️?? Christopher Zullo (@ChrisJZullo) October 10, 2019

 

I was actually just talking to one of my conservative friends about this yesterday. Those numbers are pretty much what the website I used said.

https://www.thebalance.com/us-deficit-by-year-3306306

The person in this tweet does seem to subtly switch from deficit to debt increase for that fiscal year once they got to W though.

I personally don't know exactly what the difference between deficit and debt increase is (you'd think they'd be the same), but the above website does specify between the two. For the first 3 presidents, the tweet runs right down the 2nd column, but when it gets to Bush, they jump to the third column to get that 1 trillion debt figure.

Then for Obama, it looks like they jumped back to deficit. 

I don't know if this was done intentionally because the deficit figure for the last year of Bush's presidency (459 billion) was not extreme enough and they wanted it to be higher than where Obama ended, but that seems like what they did.

As for Obama, the 585B is accurate. The starting figure, again, I'm not sure about. It is notable that, under Obama, the deficit did spike to 1.4 trilion before going back down (he was saving the economy after all). It doesn't make the tweet wrong, but I think unflattering context is important even when you're arguing your point.

The truth is Republicans are not fiscal conservatives. They either spend more money than Democrats or refuse to collect enough taxes to prevent their deficits and, as a result, the national debt from skyrocketing.

Republicans ruin an economy, a Democrat is elected to recover it and then, because the Democrat added taxes to help recover the economy, the Republicans come in, claim the credit for how well the economy is doing, cut more taxes and **** it up again. It's been a trend for the last 30+ years and I don't see that slowing down any time soon haha.

[oncemoreuntothejimbreech]

(11-15-2019, 10:22 AM)Crazyjdawg Wrote: I was actually just talking to one of my conservative friends about this yesterday. Those numbers are pretty much what the website I used said.

https://www.thebalance.com/us-deficit-by-year-3306306

The person in this tweet does seem to subtly switch from deficit to debt increase for that fiscal year once they got to W though.

I personally don't know exactly what the difference between deficit and debt increase is (you'd think they'd be the same), but the above website does specify between the two. For the first 3 presidents, the tweet runs right down the 2nd column, but when it gets to Bush, they jump to the third column to get that 1 trillion debt figure.

Then for Obama, it looks like they jumped back to deficit. 

I don't know if this was done intentionally because the deficit figure for the last year of Bush's presidency (459 billion) was not extreme enough and they wanted it to be higher than where Obama ended, but that seems like what they did.

As for Obama, the 585B is accurate. The starting figure, again, I'm not sure about. It is notable that, under Obama, the deficit did spike to 1.4 trilion before going back down (he was saving the economy after all). It doesn't make the tweet wrong, but I think unflattering context is important even when you're arguing your point.

The truth is Republicans are not fiscal conservatives. They either spend more money than Democrats or refuse to collect enough taxes to prevent their deficits and, as a result, the national debt from skyrocketing.

Republicans ruin an economy, a Democrat is elected to recover it and then, because the Democrat added taxes to help recover the economy, the Republicans come in, claim the credit for how well the economy is doing, cut more taxes and **** it up again. It's been a trend for the last 30+ years and I don't see that slowing down any time soon haha.

You probably already know this, but deficit spending deals with the annual budget while debt deals with the accumulation of annual deficit spending.

For example, this year I spent $10K more than I made, but I’ve already got a debt of $100K. The $10K is my deficit. The $100K is my debt (now $110K because of my latest deficit.)

It’s misleading or at least confusing to compare one to the other across presidents. For a good analysis one should consistently compare debt to debt and deficit to deficit or how deficit spending increased the debt for each president. Plus during the first year of any president’s tenure, the budget and any deficit is from his predecessor.

[CJD]

(11-15-2019, 12:02 PM)oncemoreuntothejimbreech Wrote: You probably already know this, but deficit spending deals with the annual budget while debt deals with the accumulation of annual deficit spending.

For example, this year I spent $10K more than I made, but I’ve already got a debt of $100K. The $10K is my deficit. The $100K is my debt (now $110K because of my latest deficit.)

It’s misleading or at least confusing to compare one to the other across presidents. For a good analysis one should consistently compare debt to debt and deficit to deficit or how deficit spending increased the debt for each president. Plus during the first year of any president’s tenure, the budget and any deficit is from his predecessor.

Yea, the reason I was a bit confused was the website says this:

Quote:The first column represents the fiscal year, followed by the deficit that year in billions. Next is the debt increase by fiscal year, followed by the deficit/GDP. Finally, the events affecting the deficit are cited. 

Deficit by year and debt increase by year sound like the same thing to me, based on your post (and my understanding), so them being different numbers is odd to me. 

The debt itself is nowhere near those numbers, as it is approximately 21 trillion dollars as of 2018. 
https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

So the tweet isn't comparing deficits to debt, it's comparing deficits to annual debt increases, or at least it appears to be.

I just don't know what the difference between an annual deficit and an annual increase of the debt is . I'm sure there's some calculation with variables that are included in one but not the other. I dunno.

[6andcounting]

(11-15-2019, 12:02 AM)GMDino Wrote: Maybe he's just not good with numbers?

Does he know how many States are in the Union? Uhm...never mind https://t.co/RTojDUQr3N

— David Valcin (@filthymcnasty) November 15, 2019

 

When he made his campaign promise to "cut the deficit in half" he thought you get there by dividing by 1/2. 

[Belsnickel]

(11-15-2019, 12:32 PM)Crazyjdawg Wrote: I just don't know what the difference between an annual deficit and an annual increase of the debt is . I'm sure there's some calculation with variables that are included in one but not the other. I dunno.

The deficit is simply the difference between the revenues and expenditures of the federal government. The annual debt is also increased by things such as valuation changes and interest charges on debt, among other things, that are not directly tied to the deficit. A deficit increase is the difference in one FY deficit and another.

CY Deficit - PY Deficit = Deficit Increase

CY Deficit + Interest on debt + currency valuation changes + miscellany = CY Debt Increase

[GMDino]

Not mentioned: One Trillion added to the markets by the Fed.  When (not if) the next downturn hits we have almost no room ro adjust to lessen the blow.

“The budget deficit has jumped more than 50 percent since Mr. Trump took office and is expected to top $1 trillion in 2020, partly as a result of the tax law.” Thanks again, swamp creature! https://t.co/p9oaGeH9CN

— Bette Midler (@BetteMidler) December 31, 2019

It's almost list when you let a man who never had to earn money handle the money he fails...just like he did in his private life.

And just like his private businesses he will walk away and leave others holding the bag filled with his failures.

[GMDino]

https://www.mediaite.com/tv/joe-scarborough-trumps-so-called-great-economy-is-worse-than-jimmy-carters-year-of-malaise/

Quote:Joe Scarborough: Trump’s So-Called Great Economy is WORSE than Jimmy Carter’s ‘Year of Malaise’



Joe Scarborough took a shot at what President Donald Trump has repeatedly called the “greatest economy ever, strongest economy ever” on Friday, making his case with a New York Times report showing slower economic growth than the president claims.


The Morning Joe segment opened with Mika Brzezinski referencing the Thursday Times report on GDP figures, following a clip of Trump boasting about expected economic growth.


“I think we can go to four, five, maybe even six percent ultimately,” Trump proclaimed. “Each percentage point is two and a half-trillion dollars. We are back. We’re really going to start to rock. We need this as our final push, and you’re going to see some numbers that are great.”

But Thursday’s report from the U.S. Commerce Department showed that GDP grew at only a 2.1 percent rate in the fourth quarter of 2019.


Writing for the Times, Patricia Cohen reported:

Quote:As the nation heads toward a presidential election, the question is whether voters will view steady but unspectacular growth as a sign that President Trump’s handling of the economy has succeeded or stumbled.

Gross domestic product, which measures the value of goods and services produced inside the United States, grew at a 2.1 percent annual rate between October and December, the same as the previous three months, according to preliminary data released by the Commerce Department. As for 2019 as a whole, the report shows that the economy turned in a weaker annual showing than it did in 2017 and 2018.
In previous decades, growth that consistently fell below 3 percent would have been seen as distressing. Now most economists — at least those outside the administration — see normal growth circling the 2 percent mark.

Before introducing Trump’s former White House Communications Director Anthony Scaramucci,  Scarborough revealed that he was “obsessed” with a graphic that compared economic growth under Trump to that under Presidents Bill Clinton and Jimmy Carter at the same time in their administration. That graphic:

“All we hear, on repeat is what Donald Trump says about the economy,” Scarborough mocked. “Greatest economy ever, strongest economy ever.” After lauding Barack Obama for never talking about “how strong the economy was on the rebound” after he inherited the Great Recession, Scarborough turned to praise Jimmy Carter.


“Look at Jimmy Carter in ‘79. This was supposed to be the year of malaise,” Scarborough said. “The year of malaise, and during Jimmy Carter’s so-called year of malaise, he was doing — his economy doing a lot better than Donald Trump. So why is it that there’s such a disconnect between, not only Donald Trump’s reality but also the talking points that the press regurgitates without thinking twice?”


Watch above via MSNBC.

[GMDino]

Booming economy!

Or not so much...

https://slate.com/news-and-politics/2020/02/trump-cuts-scheduled-federal-pay-raise-serious-economic-conditions.html?fbclid=IwAR10n7lvCivIhQuwN3byKM6rjrj598YiK4LhAkR_SZj1meu8ogXdpgbN6yI

Quote:Trump Cuts Scheduled Federal Pay Raise, Citing “Serious Economic Conditions” in the Country


FEB 12, 20209:25 AM

In public, President Donald Trump likes to boast about—and usually inflate—the performance of the American economy on his watch. He picks through the numbers to take credit for everything good and sorts out everything not-so-good for dumping on his predecessors. The result: lots of exclamation points!

Quote:
[/url]Donald J. Trump

@realDonaldTrump




BEST USA ECONOMY IN HISTORY!

189K
8:35 AM - Feb 11, 2020
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Quote:
Donald J. Trump

@realDonaldTrump




Market up big today on very good economic news. JOBS, JOBS, JOBS!

172K
10:52 AM - Feb 4, 2020
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Quote:
Donald J. Trump

@realDonaldTrump




Another new Stock Market Record. Enjoy!

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Quote:
Donald J. Trump

@realDonaldTrump




While the world is not doing well economically, our Country is doing better, perhaps, than it has ever done before. Jobs, Jobs, Jobs!

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[url=https://twitter.com/realDonaldTrump/status/1203363921995980801]
If you lived in a bubble where Twitter Trump was your sole news source, you’d be pretty fired up, which makes it odd that on Monday the very same Trump White House said it intends to slash a scheduled pay raise for civilian federal employees. Cutting the 2.5 percent raise set for 2021 to 1 percent for millions of federal workers seems a bit austere in the face of such self-proclaimed boom times. Even more absurdly, Trump is justifying ordering the cut on the grounds that the country is in the midst of a “national emergency or serious economic conditions affecting the general welfare,” which the White House says authorizes the president to “implement alternative plans for pay adjustments.”


So which is it? The best economy in the history of economies or a national economic emergency? Either way, somebody’s lying. 

I mean we all know Trump doesn't like to pay his employees, and a bunch of people "really worried about spending" will say this is a good thing to "save money", but I think it's more he's an ass.

[GMDino]

.@RepJeffries to Acting OMB Director Russ Vought on parts of Trump's budget dealing with health care and the border wall: "The president's budget is a living, breathing fact-check on all of the public lies that he's told relative to his policy priorities." pic.twitter.com/XAXj6JaqNc

— Aaron Rupar (@atrupar) February 12, 2020

 

[jj22]

If I told you once, I told you twice....

No one will care about the deficit again until a Democrat is President.