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I ain’t the sharpest economic tool in the box, but even I am pretty reasonably confident that any policy that causes a significantly increased import tax that then causes significantly increased consumption tax, significantly decreased wage growth, significantly increased layoffs, significantly decreased hiring, isn’t great for economic growth.
 
superrific said:
Maybe it costs her more to pay for child care than what she can bring in. WTF can't you understand that? Why is that you right-wingers are constantly judging people without having any fucking idea what their lives are like?
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I understand that. I know people who have done that. It doesn’t look like this. She was working 32 hours. She had a 12. 14, 17, and 22 year old at the house.

She also then made the decision to cut her hours to 26 hours to receive less in assistance than she could have made.

I feel bad for anyone struggling, but it appears that she could do more to help herself. I could be entirely wrong.
 
CFordUNC said:
I ain’t the sharpest economic tool in the box, but even I am pretty reasonably confident that any policy that causes a significantly increased import tax that then causes significantly increased consumption tax, significantly decreased wage growth, significantly increased layoffs, significantly decreased hiring, isn’t great for economic growth.
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most people don’t have a clue about how the economy works.
So, a wise person would listen to what the experts are saying.
Others consult Facebook memes.
 
Purple Nurple said:
It almost like the bill should do something to encourage investment of those new dollars from tax relief.

In short, changes like allowing upfront depreciation of assets and immediate expensing of research-and-development expenses will bring swift windfalls to American corporations but also lasting tailwinds.
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Eh. Here's the thing: the R&D expense was changed in 2022 (it was actually a change mandated by the 2017 Act) going back to amortization of research expenses. Overall R&D spending didn't change much, if at all. It grew 5% in real terms in 2023, pretty much in line with the historical trend. So maybe there's a slight increase in R&D spending. Let's say the effect is 5% (implying that R&D would have grown by 10% after 2022). That's about $70B, which is a rounding error in the economy. It will definitely not keep the economy humming.

And about 50-75% of business investment is done in-house, with the remainder at contract firms or universities. Guess what? That university R&D number is coming down. A business can't just move a laboratory from a university in-house. So whatever benefits might come from the tax expensing are probably going to be neutered (or more) by the cuts to research funding and the exodus of scientists. Note that the expensing only applies to domestic R&D.

Thing is, most businesses don't R&D because they want to. They do it because they need to, to retain market positioning. While there can be some play in the joints at the margins, it's not going to make a huge difference on the totals. There's some elasticity at the margins but that elasticity decreases pretty quickly, based on what I have read. I'm by no means an expert in this area.

I think it's pretty fair to conclude that, best case, R&D expensing will lead to increases in R&D spending that are very small compared to the economy. And meanwhile, we get accounting distortion, and possible increase in cyclicality.
 
Purple Nurple said:
I understand that. I know people who have done that. It doesn’t look like this. She was working 32 hours. She had a 12. 14, 17, and 22 year old at the house.

She also then made the decision to cut her hours to 26 hours to receive less in assistance than she could have made.

I feel bad for anyone struggling, but it appears that she could do more to help herself. I could be entirely wrong.
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You missed the 3 year old. The 22 year old moved out, meaning less child care provided by older siblings. But more to the point: you have no idea of her actual circumstances. Maybe the 3 year old was diagnosed as autistic. Maybe her kids are having some disciplinary issues. It just seems like POS thing to do to say, "she should work more" without understanding her constraints.

And sure, the $220 in food benefits probably helped. I very much doubt it was why she reduced her hours, but it made quitting more palatable and affordable. That's the whole point of food aid. To provide food for people who otherwise have trouble affording it. Does that mean that food assistance phase-outs have an unintended side effect of discouraging work? Yes. That's true for every phase-out program. But the effect has been measured many, many times and it's small. The vast majority of people do not cut hours to get benefits -- and as you can see, even here the cut was not that big. Usually these decisions are taken out of necessity, not choice.
 
YAY !

The very horrible trade deficit is narrowing !

I'm no economist, but don't trade deficits end up destroying our economy and provide no benefits for consumers or lead to economic and job growth ?
I think I read somewhere that the downside to a trade surplus could lead to higher prices and interest rates and stagnate economic growth. The example I read is Japan that has been running a trade surplus for years.

It's so confusing. I'm at the point where I'm thinking trade balances don't really matter, but I don't understand economics all that much.

 
heelslegup said:
As the economic numbers continue to deteriorate, just remember it's not the Fed, To paraphrase James Carville: "It's the tariffs, stupid,L

Trump has the same extremist views on tariffs than Sam Brownback had on tax cuts when he became Kansas governor, which had disasttous consequences and the tax cuts we reepealed.

We will see if Canada slaps some surcharges on their oil expots to US, and Carney unleashes the Ontario leaders to play the electrricity power card/ Sort of rare earths ploy, Canada style
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I hope Carney can distinguish between blue and red border states that receive Canadian power
 
superrific said:
You missed the 3 year old. The 22 year old moved out, meaning less child care provided by older siblings. But more to the point: you have no idea of her actual circumstances. Maybe the 3 year old was diagnosed as autistic. Maybe her kids are having some disciplinary issues. It just seems like POS thing to do to say, "she should work more" without understanding her constraints.

And sure, the $220 in food benefits probably helped. I very much doubt it was why she reduced her hours, but it made quitting more palatable and affordable. That's the whole point of food aid. To provide food for people who otherwise have trouble affording it. Does that mean that food assistance phase-outs have an unintended side effect of discouraging work? Yes. That's true for every phase-out program. But the effect has been measured many, many times and it's small. The vast majority of people do not cut hours to get benefits -- and as you can see, even here the cut was not that big. Usually these decisions are taken out of necessity, not choice.
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Actually, the article ( which I just read the entirety of) states her circumstances pretty well. There is no child care issue (I didn’t mention the three year old because I was listing those that could help with child care. Turns out the 17 year old covers it).

She collects 25-30k a year in assistance from the government. She should work more than 26 a week if she wants to better the life of her family.
 
nycfan said:
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One thing we learned in Trump's first term is that high-quality, top-level talent simply does not want to work for him, as anyone who works for him is simply treated as a flunky and glorified gofer who is expected to carry out even his smallest whims, constantly kiss his ass, and display total loyalty while getting none in return. The list of his minions whose careers and even lives have been ruined by working for or with him is a mile long, including Rudy Giuliani and Mike Lindell. Bessent is just such a third-rate glorified gofer, but even he's probably smart enough to know that as a Fed Chair he would constantly be in Trump's line of fire if anything goes wrong economically, even more than in his current role. No doubt the person Trump replaces the Fed Chair with would likely not have been chosen for the post by a Democrat or more mainstream Republican (like a Romney or Dubya type).
 
heelinhell said:
YAY !

The very horrible trade deficit is narrowing !

I'm no economist, but don't trade deficits end up destroying our economy and provide no benefits for consumers or lead to economic and job growth ?
I think I read somewhere that the downside to a trade surplus could lead to higher prices and interest rates and stagnate economic growth. The example I read is Japan that has been running a trade surplus for years.

It's so confusing. I'm at the point where I'm thinking trade balances don't really matter, but I don't understand economics all that much.

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ChatGPT can answer these questions.

Trade deficit is actually called a current account deficit, and the current account = capital account * -1. So a current account deficit creates a capital account surplus, and a capital account deficit creates a current account surplus.

One way to decrease a current account deficit is to reduce the capital account surplus -- for instance, by rejecting foreign investment. Likewise, reducing the trade deficit with tariffs decreases the capital account surplus. So here are some scenarios:

1. Economic boom. This will boost US consumption, and thus increase US imports. It will also make foreigners want to invest in the US, which will increase foreign investment. Trade deficit will increase, and it would be a sign of prosperity. Note that sometimes this investment is in the form of financing the US government (i.e. buying treasuries). When that investment declines while the federal budget deficit increases, the result is higher prices and/or higher interest rates.

2. Economic slump; This will decrease US consumption, and decrease imports. It also makes foreigners less likely to invest in the US, and thus the trade deficit falls.

3. Export-led growth. Increases exports, which results in a current account surplus , and thus a capital account deficit. That is, the exporter is financing investments outside its domestic economy. In the case of Asian export economies, this investment usually comes in the form of government debt, which is where they park the dollars they get in exchange for their goods. This is a sweet spot.

4. Tariffs. Decreases imports. Creates a current account surplus relative to before. Either the capital account has to adjust (meaning less foreign investment = less investment in the economy plus a loss of business activity), or the current account has to offset elsewhere. It could in theory be increased exports but that's highly unlikely given that the tariffs don't actually help American exporters abroad. So the adjustment will be in a currency effect or in inflation or in reduced consumption -- i.e. a recession.

As Paul Krugman says, there are no immaculate transfers. That is, there has to be a mechanism through which an accounting identity occurs, and the nature of that mechanism depends on policy and economy. Here, the trade deficit narrowing is probably simply a reflection of lower domestic consumption and probably some lower foreign investment as well.
 
Mulberry Heel said:
One thing we learned in Trump's first term is that high-quality, top-level talent simply does not want to work for him, as anyone who works for him is simply treated as a flunky and glorified gofer who is expected to carry out even his smallest whims, constantly kiss his ass, and display total loyalty while getting none in return. The list of his minions whose careers and even lives have been ruined by working for or with him is a mile long, including Rudy Giuliani and Mike Lindell. Bessent is just such a third-rate glorified gofer, but even he's probably smart enough to know that as a Fed Chair he would constantly be in Trump's line of fire if anything goes wrong economically, even more than in his current role. No doubt the person Trump replaces the Fed Chair with would likely not have been chosen for the post by a Democrat or more mainstream Republican (like a Romney or Dubya type).
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I think it's more that federal reserve chair is a time commitment that Bessent probably doesn't want to make, given that he would have to put assets in a blind trust and wouldn't be able to carry on his business activities for seven years. It would cost him a lot more money than the likely two years he will spend at Treasury (not uncommon for Treasury secretaries to turn over relatively frequently).
 
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