April Treasury Data Equate to More Budget Deficits

TheEconomist said:

For starters, if you're trying to corner Trump on hypocrisy, you'll have to argue he implanted long term tax cuts for short term effects. If you're thinking about how the tax system should work in the long run, it doesn't matter that the economy is booming or not. You just put the tax cut in effect when you have the political support.

I am not trying to defend his tax plan, by the way. I have no opinion on whether it was right or wrong.

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The support was strictly Bipartisan. The Corporate tax cuts benefit the wealthy about 9 to 1, and the wealthy were the primary benefactors of the personal tax cuts.

Media_Truth said:

The support was strictly Bipartisan. The Corporate tax cuts benefit the wealthy about 9 to 1, and the wealthy were the primary benefactors of the personal tax cuts.

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Who are "the wealthy" and how did you determine it benefited "them" 9 to 1? By what metric and how did you account for the consequences on the behavior of the many people concerned?

TheEconomist said:

Who are "the wealthy" and how did you determine it benefited "them" 9 to 1? By what metric and how did you account for the consequences on the behavior of the many people concerned?

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Have you looked into the Trump/GOP 2017 tax cuts at all?

Trump and the GOP clearly stated that the expected increase in economic activity would pay for the tax cuts. This hasn't happened.

They also stated that corporations would take their tax bonanza and invest it in corporate expansion and hiring more workers. This hasn't happened either.

The tax benefit to wealthy individuals (like Trump and Kushner) was profound. The tax benefit to Joe Schmoe was negligible.

We now have US historic highs in the trifecta ... the federal debt, the federal deficit, and the trade deficit.

Rogue Valley said:

Have you looked into the Trump/GOP 2017 tax cuts at all?

Trump and the GOP clearly stated that the expected increase in economic activity would pay for the tax cuts. This hasn't happened.

They also stated that corporations would take their tax bonanza and invest it in corporate expansion and hiring more workers. This hasn't happened either.

The tax benefit to wealthy individuals (like Trump and Kushner) was profound. The tax benefit to Joe Schmoe was negligible.

We now have US historic highs in the trifecta ... the federal debt, the federal deficit, and the trade deficit.

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You make here two claims regarding the consequences of a policy. The only logically valid way you can tell if the policy had or had not the intended effect is comparing what happened with an alternative scenario. We have formal methods for doing this. You can pick one of many structural VAR methods, estimate a theoretical model such as a DSGE using maximum likelihood, Bayesian methods or GMM, or even resort to a calibration approach, or you can use regression-based methods such as difference-in-differences, assuming you can find a close proxy to the relevant subsets of people concerned, or else you can try to use instrumental variables methods, etc. The list is very long, but all of them have in common the more or less explicit construction of the missing alternative scenario, the distance from which is a measure of the effect of the policy.

Did you do it yourself or did you read papers from people who did just that? Or maybe you're approximating the effect using previous studies. Regardless of which of these 3 options, can you tell us a bit about the methodology? I am genuinely curious as to how exactly you came to the conclusion that the claims made by the proponents of the policy cannot be borne out by the data.

Personally, I have no strong opinion on the subject. I am merely using my technical knowledge to pressure people who make strong claims to show us all if their knowledge is as deep as their convictions. In my experience, it is a very disappointing exercise and it usually shows people are not interested in talking about policy problems, but merely in showcasing verbal partisan badges, rationalizing their hostile sentiments to specific sets of policies with sweeping claims that crumble under the slightest effort of scrutiny. I do it for the oddball who will have a discussion with an appropriately high degree of reserve and humility.

TheEconomist said:

Who are "the wealthy" and how did you determine it benefited "them" 9 to 1? By what metric and how did you account for the consequences on the behavior of the many people concerned?

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Corporate Tax Cuts

TheEconomist said:

Personally, I have no strong opinion on the subject.

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Then you haven't been reading your own posts. All you've done so far is offer apologia for the Trump/GOP tax cuts.

Rogue Valley said:

Then you haven't been reading your own posts. All you've done so far is offer apologia for the Trump/GOP tax cuts.

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Apologize for allowing people to keep more of what they earn? You don't see a problem there? That is the problem with liberals, they believe the money belongs to the gov't and God forbid that gov't go on a diet while people keep more of what they earn!

where on earth did you get the education that tax cuts are an expense and have to be paid for? It is so sad to see so many buying that ideology and belief that "help" for the people in need stops because of tax cuts when the reality is that people donate more to charity when they have more spendable income and need less of that so called gov't help when they have more spendable income which tax cuts generate

Conservative said:

Apologize for allowing people to keep more of what they earn?

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The Trump/GOP tax cuts didn't send me on a Caribbean cruise.

But Trump saved many millions from the tax bonanza. Go figure.

humbolt said:

Which lies and excuses would you prefer? I have normal ones, outrageous ones, and the ones from the Obama administration none of y'all wanted to talk about back then.

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Greetings, humbolt. :2wave:

Your choice - too difficult to have to make such a decision - they all sound interesting! :mrgreen:

Rogue Valley said:

The Trump/GOP tax cuts didn't send me on a Caribbean cruise.

But Trump saved many millions from the tax bonanza. Go figure.

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So what? were you supposed to get a Caribbean Cruise out of your tax cut? So why does it bother you that the people who pay the most in taxes gets the most tax cuts? how does that hurt you, your family, or the country? Go figure? what is it about liberals like you who are jealous of what others have and what they pay or get back in taxes?

Conservative said:

So what? were you supposed to get a Caribbean Cruise out of your tax cut? ?

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Trump promised everyone a noticeable relief from taxes.

Didn't happen. Another lie perpetuated by the Liar in Chief.

btw .... how to explain the OP?

When is the current historical federal deficit going down?

And the current historical federal debt? And the current historical trade deficit?

Why isn't your hero on Pennsylvania Avenue handling these things?

Rogue Valley said:

Trump promised everyone a noticeable relief from taxes.

Didn't happen. Another lie perpetuated by the Liar in Chief.

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No, the lie is yours, people get to keep more of what they earn on EVERY PAYCHECK!! Cannot believe how poorly informed you are. You have been indoctrinated well

Rogue Valley said:

btw .... how to explain the OP?

When is the current historical federal deficit going down?

And the current historical federal debt? And the current historical trade deficit?

Why isn't your hero on Pennsylvania Avenue handling these things?

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Donald Trump will not come close to the debt created buy Obama and yet for some reason this is an issue now. You are totally poorly informed on the line items that drove up the 2018 deficit so educate yourself and stop letting the left make a fool out of you

Rogue Valley said:

Then you haven't been reading your own posts. All you've done so far is offer apologia for the Trump/GOP tax cuts.

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The people I happened to question or whose opinions I challenged happened to be very critical of this tax plan. It's quite different than making the case that this tax plan is a good plan. If you go through what I wrote, you might find arguments that some people could use in defense of the plan, but the statements I made were quite general and not specific to this tax plan. It really was meant to draw responses out of curiosity. However, if you're working from the presumption that people must be uninformed, gullible, stupid, deceived by their own political party, or some other explanation of the sort to back up the plan, as well as assume that the only thing we can do here is take a side, then I must be the enemy and my claims must be apologetic because there's just no other option left. Otherwise, your conclusion is unwarranted. The only positions I took were concerned with the arguments others made or some aspects of those arguments.

Media_Truth said:

Corporate Tax Cuts
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It doesn't tell me where you make the binary cut of those who you call wealthy and those you call non wealthy. Moreover, I don't know which of these values you compared to get a 9 to 1 ratio.

As for the other picture, the NY Times probably picked out the transformation of real GDP that would show the most appealing storyline they could find. It's an unusual thing to use 5 year slidding window average values. It does smooth out some of the intermittent movement, but it also has the unpleasant consequence of increasing autocorrelations (i.e., the time series is more persistant like this than in quarterly growth rates, or slidding yearly growth rates as is more often used). Nevertheless, if you run an eyeball test, you get a feel for the correlation between tax cuts and 5 years slidding window growth rates in the US.

Just to be clear, if you think that this correlation is meaningful, it means you're implicitly using the 1990s and late 1980s values as proxies for the alternative "higher taxes" scenario that never happened in the 2000s*. Ask yourself if anything close to 3 to 4 % growth rate on an annual basis is reasonable for the US in 2019, or if changes in the structure of the economy would make this infeasible. I have no idea as I am not acquainted with work on long term economic growth. If you have any reason to believe this can make sense without fudging over accounting identities, you can try to make that case. I would be curious to know.
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* Formally, you have to impose some kind of orthogonality condition to pin down causal effects using correlations and similar statistics. What I gave you above is the intuition behind one of the many possible sufficient conditions for this. Another condition, this time necessary, is that the underlying process is second order stationary and ergodic -- i.e., the past is enough like the future that you can use it to span missing scenarios in the future. Generally, we have to include much more than one veriable in our analysis to meet these two conditions, even apporoximatively.

TheEconomist said:

The only positions I took were concerned with the arguments others made or some aspects of those arguments.

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Yes, you don't actually have a position of your own on anything do you? Why not take a stab at deciding if you're liberal or conservative?