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Thread: It looks like Trump want to explode the deficit

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by JohnfrmClevelan View Post
    You're missing the part where you explain why increasing the deficit to spend on infrastructure will harm the economy. As always.
    My post was only about the deficit. Whether or not said deficit spending would help or hurt the economy depends on my factors. There is no one answer.

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by Chomsky View Post
    re: #'s 1 - 4.

    Theory & campaign rhetoric. The actual occurrence (and proposed savings) is T.B.D.

    (I do believe some form of #4 may occur, but again its efficacy - like the above - is T.B.D,)
    The whole post is about campaign rhetoric, isn't it?

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by KLATTU View Post
    The whole post is about campaign rhetoric, isn't it?
    Essentially.

    That's not to say some won't be implemented.

    It's all very T.B.D. though, and not sufficient IMO to make a strong economic argument.

    But I suppose it's O.K. for theoretical discussion.
    "When fascism comes to America, it will be wrapped in the flag and carrying a cross." - Sinclair Lewis

    The 10 Commandments of Logic - (Courtesy of Abbazorkzog Blog)

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by kamikaze483 View Post
    I think you are missing the following:

    1) The Department of Energy submitted a budget request for $32.5 billion dollars
    Trump has appointed Rick Perry who wishes to significantly dismantle the Department through consolidation of the critical components with other agencies and eliminating the rest. There's a lot of money right there.
    I'm sorry, but that is sheer insanity.

    Trump's plan cuts revenues by about $440 billion per year. $33 billion is a drop in the bucket.

    The DoE is less than 1% of the federal budget. Guess where half that money is spent? Oversight, maintenance and security of nuclear materials. So if you don't mind terrorists walking off with a bunch of fissile materials, go ahead and eliminate the DoE.


    2) The request from the Department of Education was 69.4 BILLION DOLLARS....
    "Block grants" are not free. It means giving money to the states without stipulations. So unless you're also going to slash federal spending on education by a huge amount, switching to block grants saves nothing.


    3) Scott Pruitt has been assigned to the EPA, a person who has advocated the elimination of that department. The budget there is 8.267 billion ...
    That's 2% of the gap.

    You've proposed $108 billion in cuts -- most of which we can't actually cut -- which leaves a $332 billion deficit.

    And of course, slashing that spending will in fact cause a contraction in GDP, and job losses, which means even less tax revenues.

    I hate to break this to you, but nearly 80% of federal spending is Social Security, Medicare, Medicaid, Defense, Veterans, and interest. Those programs are either untouchable, or Trump has put them off the table (notably defense). That's AFTER years of spending cuts. Unless we severely cut entitlements to seniors and defense spending, we cannot make this tax cut revenue-neutral via spending cuts.

    Next time, check your math.




    4) Trump's tax plan: Simplify the tax code to four brackets....
    IRS budget is $11 billion. Yet again, that is chump change as far as the federal budget and Trump deficit are concerned.

    If Trump was proposing a tax cut that was genuinely revenue-neutral, and did not wind up taxing the bottom 99% to make tax cuts for the top 1%, that would not be a big issue. Heck, if it was reasonably fair and still progressive enough, I'd be fine with that.

    If you expect that to happen, then you are morally obligated to tell us all what you're smoking, and pass it around.

    The last tax plan he released during the campaign offered nothing of the sort. It's a huge tax cut for the wealthy; the top 1% will see their taxes drop by 6%, while the bottom 80% would see 1.7% cuts. It would also eliminate estate taxes, which currently only kick in for estates of $5.4 million and higher (less than 1% of the US population).

    Unsurprisingly, Trump's tax plan would heavily benefit... Trump and his family. It would reduce the pass-through rate on his business from 35% to 15%; it would lower his personal taxes by around 8-10%; it would completely eliminate any estate taxes he might have paid. Surprise!


    Many on the left think the only way to shrink a deficit is to raise taxes. Spending reductions have the same effect.
    Actually, it's not quite the same. For example, pretty much all of Social Security goes into the hands of elderly Americans, who are taxed on it. They also spend it, which generates economic activity, and thus taxable activity. So if we cut Social Security by 10%, tax receipts are likely to drop slightly.

    The same if it's a program that employs people, like education. If we have to fire 500,000 teachers because we cut education spending by $70 billion (and yes, that could definitely happen) then that is 500,000 less people who we can tax, or might only tax at a lower rate if they can't find a comparable job, and again that's a big reduction in economic activity.

    Last but not least: The US has slashed taxes repeatedly since the 1980s. We've almost never raised taxes since the Reagan years. We keep cutting and cutting, and the debt keeps going up, and the cuts are never enough to satisfies Republicans or conservatives, for whom tax cuts are the solution to every problem -- even when they are destroying a state like Kansas.

    So go ahead, explain to us how we can slash $440 billion from federal spending, without spending the US economy into a tailspin. Then watch as Trump borrows trillions to pay for his tax cuts for the rich.

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by Chomsky View Post
    Essentially.

    That's not to say some won't be implemented.

    It's all very T.B.D. though, and not sufficient IMO to make a strong economic argument.

    But I suppose it's O.K. for theoretical discussion.
    Of course- what else is this forum for, but for us theorists to debate!

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by Visbek View Post
    We keep cutting and cutting, and the debt keeps going up, and the cuts are never enough to satisfies Republicans or conservatives, for whom tax cuts are the solution to every problem -- even when they are destroying a state like Kansas.
    Tax cuts, while principally designed to benefit the wealthy, also have the secondary effect of creating budget deficits which are then used by Conservatives as an excuse to cut spending they otherwise would have no chance of cutting. Those cuts are almost always operational, causing those programs to fail. Then Conservatives point to the failures of those programs as an excuse to sell them off to private interests who profit off them.

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by Incisor View Post
    No they don't, because spending reduction results in less spending, which means less revenue.
    This comment makes no sense. Government spending is not the only type of spending. You seem to infer that the only way to grow the economy is to increase government spending, which is not true.
    "We need to ask some very tough questions of the senator from Illinois. It's not enough to be black, it's not enough to be articulate, it's not enough to be eloquent and a media darling. The only question will be how deaf an ear, or how blind an eye will people turn in order to turn a frog into a prince." -Eddie Huff

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by Chomsky View Post
    Exactly!

    Rates are already bumping-up w/o any external influence.

    And now he wants tariffs!

    But just wondering, Jo: How would you describe the current state of the U.S. economy?

    (I put down my thoughts in post #7)
    Of course it is TBD. It is theorettical as everything listed in the OP is theoretical. Trump is not yet the President so of course it is TBD.
    "We need to ask some very tough questions of the senator from Illinois. It's not enough to be black, it's not enough to be articulate, it's not enough to be eloquent and a media darling. The only question will be how deaf an ear, or how blind an eye will people turn in order to turn a frog into a prince." -Eddie Huff

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by kamikaze483 View Post
    Government spending is not the only type of spending.
    You are assuming the private sector will somehow magically fill the void of government demand when that has never been the case, ever. You seem to argue that the private sector will increase spending by the amount you cut from government, creating a net-zero effect. And that's just lunacy.

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    Re: It looks like Trump want to explode the deficit

    Quote Originally Posted by kamikaze483 View Post
    You seem to infer that the only way to grow the economy is to increase government spending, which is not true.
    No, you're inferring that from my post because there's no other way your argument makes any sense. I never said the only way to grow the economy is to increase government spending. You are trying to put words in my mouth in order for you to make an ideological point. Here's the thing; in no world will the private sector ever be able to make up for the drop in demand from government spending cuts. No way. Not ever. What Conservatives argue for, whether they know it or not, is deflation. And deflation is the worst possible thing to happen to the economy.

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