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Old 01-26-2018, 07:08 AM
 
Location: Shawnee-on-Delaware, PA
3,676 posts, read 3,257,433 times
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Quote:
Originally Posted by rruff View Post

Are you mistakenly believing that the stock market has anything to do with the economy? When the rich get richer, and the economy is sick, then assets (like stocks) get inflated, as opposed to actual investing. SP500 P/E ratio is about double the long term average. The price is not based on anything real, economically.

Nope. I tend to look at GDP growth, which never hit 3% annual growth in the previous 8 years. We're poised to hit that, and more, now. It's a reasonable expectation. The previous Administration kept one foot on the brake and one foot on the gas, and the economy grew anemically for 8 years.


Also, you need to look at more than just the stock market. Look at unemployment, which continues downward and is now at historic lows.


Quote:
He just passed a big deficit spending (fiscal stimulus) tax reform, so of course that will goose the "economy" for awhile. Always does.
I'm not going to argue this with a Lefty. Tax cut always bring in more money because they stimulate economic activity.


And the tax cuts could have been made "permanent" if a few Democrats had gotten on board. I think many of them are regretting that now, after seeing how successful they've been and how welcome they are.


Anyway, good luck rooting against the American economy. Maybe the sky will really fall one day.
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Old 01-26-2018, 07:09 AM
 
Location: Shawnee-on-Delaware, PA
3,676 posts, read 3,257,433 times
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Quote:
Originally Posted by greywar View Post
Maybe you should read what he said about it then. This is from 3 days after his initial prediction that everyone focuses on:

https://krugman.blogs.nytimes.com/20...the-long-haul/

Thanks for posting this. I read it, and I'm not impressed that Krugman is trying to buy time in the hope that bad stuff will yet happen.
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Old 01-26-2018, 10:05 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
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Quote:
Originally Posted by jtab4994 View Post
Nope. I tend to look at GDP growth, which never hit 3% annual growth in the previous 8 years. We're poised to hit that, and more, now. It's a reasonable expectation. The previous Administration kept one foot on the brake and one foot on the gas, and the economy grew anemically for 8 years.
Do you have any appreciation for the horrendous bubble that popped in 2008? It was 1929 proportions. The "brakes" were controlled by congress which refused deficit spend an amount appropriate to the state of the economy.

But now that has suddenly changed. Has happened every time since I've been alive, and probably long before. Deficits are a big problem... and then they aren't!

Quote:
Look at unemployment, which continues downward and is now at historic lows.
Look at median income which has been essentially flat for 40 years.

Quote:
I'm not going to argue this with a Lefty.
Who is this Lefty you speak of?

Quote:
Tax cut always bring in more money because they stimulate economic activity.
Nonsense. Deficit spending stimulates the economy. Increasing demand stimulates the economy. But neither is a long term solution to anything. Increasing productivity is the only thing that makes us richer in the long run.

Quote:
And the tax cuts could have been made "permanent" if a few Democrats had gotten on board. I think many of them are regretting that now, after seeing how successful they've been and how welcome they are.
You are claiming economic success for something that happened a couple months ago? Your horizon gets shorter all the time.
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Old 01-26-2018, 10:17 AM
 
3,530 posts, read 2,175,605 times
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Quote:
Originally Posted by jtab4994 View Post
Tax cut always bring in more money because they stimulate economic activity.
Why would this happen? The simplest expectation would be that it has no impact, right? The government would spend less money, cut taxes, that money would be in private hands so that they could spend it, but that adds up to the same GDP. Why would tax cuts cause GDP to increase?

I mean, there are many reasons why it might or might not, but I'd like to know what your reasons are.
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Old 01-26-2018, 10:25 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
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Quote:
Originally Posted by FrankMiller View Post
Why would tax cuts cause GDP to increase?
Because the tax cut puts more money in private hands, but government spending is not reduced. Deficit spending is stimulative.
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Old 01-26-2018, 12:18 PM
 
3,530 posts, read 2,175,605 times
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Quote:
Originally Posted by rruff View Post
Because the tax cut puts more money in private hands, but government spending is not reduced. Deficit spending is stimulative.
Well, sure, but that's an argument for deficit spending, not for tax cuts. And given that you're deficit spending, the evidence shows tax cuts are one of the least effective ways to do it (compared to various forms of increased spending, for example).
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Old 01-26-2018, 12:54 PM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
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Quote:
Originally Posted by FrankMiller View Post
Well, sure, but that's an argument for deficit spending, not for tax cuts. And given that you're deficit spending, the evidence shows tax cuts are one of the least effective ways to do it (compared to various forms of increased spending, for example).
Sure it's least effective because tax cuts target the wealthy more than the poor.

If only we suffered from a lack of capital, then giving the rich more money would solve the problem. Oh wait... that has never happened in history! And we are currently farther from that being the case than we have ever been.

The change in tax law regarding corporate overseas holdings may induce some domestic real investment. I haven't paid much attention to that.
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Old 01-26-2018, 01:22 PM
 
Location: Shawnee-on-Delaware, PA
3,676 posts, read 3,257,433 times
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Quote:
Originally Posted by FrankMiller View Post
Why would this happen? The simplest expectation would be that it has no impact, right? The government would spend less money, cut taxes, that money would be in private hands so that they could spend it, but that adds up to the same GDP. Why would tax cuts cause GDP to increase?

I mean, there are many reasons why it might or might not, but I'd like to know what your reasons are.
I hope you've watched the news in the last month or two. As a result of the tax reform, hundreds of the largest companies have given out $1,000+ bonuses and wage increases to millions of workers. That's private money, and it stimulates the economy on the demand side. Many 1-percenters on the Left sniff that $1,000 is "peanuts" but it is a lot of money to many low-wage workers, and it does impact those people's lives.


Also in the news recently was Apple Corp "repatriating" about $38 billion of dollars in profit now that the rate has been lowered. That's income from foreign sources that could not be brought back home without paying a huge tax bill. Well, the tax bill is still huge but less huge than it would have been. And the money goes into the U.S. economy rather than sitting in a Cayman Islands, Guernsey, or Irish bank.


There are other examples, but you get the idea.
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Old 01-26-2018, 01:30 PM
 
Location: Shawnee-on-Delaware, PA
3,676 posts, read 3,257,433 times
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Quote:
Originally Posted by rruff View Post

Who is this Lefty you speak of?



Quote:
Nonsense. Deficit spending stimulates the economy. Increasing demand stimulates the economy. But neither is a long term solution to anything. Increasing productivity is the only thing that makes us richer in the long run.
Putting people back to work increases productivity. Laying about, collecting disability and popping opioids is no future.

Quote:
You are claiming economic success for something that happened a couple months ago? Your horizon gets shorter all the time.

Talk to you in a couple of years.
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Old 01-26-2018, 02:31 PM
 
7,008 posts, read 6,641,386 times
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Quote:
Originally Posted by Quietude View Post
Of course they are. They're economists, too! Krug's a Yale/MIT Ph.D., at least.
It's called capture.

It doesn't matter what his credentials are, except to the interests for whom he is a paid advocate. Each side has one of his ilk.

https://hbr.org/2014/09/have-economi...ness-interests

These people get rewarded by business and political interests with consulting contracts, speaking fees, and advertisements for their employer.
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