US Politics Mega-thread - Page 543

On July 26 2018 22:01 Plansix wrote:
Trump is going to end up slowly smothering the economy and hurting the very people who voted for him, while the rest of the world just cuts trade deals with anyone who isn’t the US.

On July 26 2018 22:27 schaf wrote:
Might also be that they see pain and suffering everywhere and think it's a good idea to help people.

Then again, they are still politicians.

(This all goes to show that a uniform, Medicare-like program would be a far superior alternative in the first place.)

On July 26 2018 23:35 Plansix wrote:
There would need to be a 2008 level of victory with a majority of progressives to make passage of a bill like that possible. It would be great if it could happen, but I don’t think that level of change in the next decade or so.

On July 26 2018 22:49 screamingpalm wrote:
It's not really difficult to understand that increased taxes diminish aggregate demand. There is a reason why Oregon consistently has one of the highest unemployment rates in the country. With less consumer spending power comes less income for business, leading to more layoffs, leading to more people using the safety net, and then? Raise taxes again and go back to the beginning of the cycle of even less aggregate demand leading to less business income... etc.




Exactly. And done at the federal level without the need of taxes.

On July 26 2018 22:49 screamingpalm wrote:
It's not really difficult to understand that increased taxes diminish aggregate demand. There is a reason why Oregon consistently has one of the highest unemployment rates in the country. With less consumer spending power comes less income for business, leading to more layoffs, leading to more people using the safety net, and then? Raise taxes again and go back to the beginning of the cycle of even less aggregate demand leading to less business income... etc.




Exactly. And done at the federal level without the need of taxes.

On July 26 2018 23:51 iamthedave wrote:


As doom-laden as the past year and a half has been, there is always the outside possibility that Trump is a flash in the pan and gets unseated in three years' time, and a Democrat takes over, with the nation having been finally exhausted by his cavalcade of horseshit and just wanting him gone.

One can hope, right?

On July 26 2018 23:53 chocorush wrote:

If you have an actual economics background, you should know better than to say that it's easy to understand that if X happens, Y will happen.

When a tax (on what, who? you seem to have strong opinions on what's going to happen without clearly defined premises) is increased, it's presumed that the revenue from the tax is being redistributed to a part of the population. That redistribution naturally has an upwards influence on aggregate demand. Depending on who it is distributed to, that effect can be greater than the downwards influence of the tax.

Depending on how the tax is used, it can also change the very nature of preference functions across the population. An extreme example is that people not dying because they have access to healthcare will obviously affect demand. The effect of a tax on the entire economy is indeterminate, because we aren't just looking at micro-economic functions where one variable changes.

On July 26 2018 23:53 JonnyBNoHo wrote:
Taxes reduce demand and government spending increases it.

Also, private savings reduces aggregate demand as well. So, the government borrowing (rather than taxing) increases AD, and households buying that debt (saving) reduces AD in turn.

In other words it's all a wash, unless certain components are out of sync with another.

On July 27 2018 00:03 screamingpalm wrote:


A tax is a drain on the economy. You are decreasing consumer spending power without federal spending to offset it. The redistribution is going towards a program, not financial assets.





Yes, I agree with all of this. But, it isn't a wash when we are reducing the federal deficit and increasing taxes. As you sort of point out, taxing and spending are separate functions (at the federal level that is).

On July 27 2018 00:03 screamingpalm wrote:


A tax is a drain on the economy. You are decreasing consumer spending power without federal spending to offset it. The redistribution is going towards a program, not financial assets.





Yes, I agree with all of this. But, it isn't a wash when we are reducing the federal deficit and increasing taxes. As you sort of point out, taxing and spending are separate functions (at the federal level that is).

I have just spent a week in Beijing talking to officials and intellectuals, many of whom are awed by his skill as a strategist and tactician…He [Yafei] worries that strategic competition has become the new normal and says that “trade wars are just the tip of the iceberg”.

…In Chinese eyes, Mr Trump’s response is a form of “creative destruction”. He is systematically destroying the existing institutions — from the World Trade Organization and the North American Free Trade Agreement to Nato and the Iran nuclear deal — as a first step towards renegotiating the world order on terms more favourable to Washington. Once the order is destroyed, the Chinese elite believes, Mr Trump will move to stage two: renegotiating America’s relationship with other powers. Because the US is still the most powerful country in the world, it will be able to negotiate with other countries from a position of strength if it deals with them one at a time rather than through multilateral institutions that empower the weak at the expense of the strong…

My interlocutors say that Mr Trump is the US first president for more than 40 years to bash China on three fronts simultaneously: trade, military and ideology. They describe him as a master tactician, focusing on one issue at a time, and extracting as many concessions as he can. They speak of the skillful way Mr Trump has treated President Xi Jinping. “Look at how he handled North Korea,” one says. “He got Xi Jinping to agree to UN sanctions [half a dozen] times, creating an economic stranglehold on the country. China almost turned North Korea into a sworn enemy of the country.” But they also see him as a strategist, willing to declare a truce in each area when there are no more concessions to be had, and then start again with a new front.

On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff.