" what’s good for multinational corporations is not necessary good for America. "
And yet JD Vance is also publicly threatening NATO if the EU continues to regulate Twitter. So clearly some corporations to whom some people owe huge favors, are going to be treated as if they are good for America.
Additionally it is worth noting that Trump routinely promised to roll-back Biden's efforts to crack down on tax dodging by reducing the size of the IRS and rolling back the inflation reduction act. So the plan is not only to cut taxes but to cut collections drastically at which point we get into a hole even if they do not add "new" tax cuts.
It’s hilarious to me to think that the GOP actually cares about deficits or will do anything about them. It’s a good cudgel for attacking Dems but their record in office makes it quite clear that given the chance the GOP will cut taxes but not spending (because that makes people mad, and above all Trump wants people to like him). I hope I’m wrong about this, but I expect the Republicans in congress will go along with extending tax cuts, maybe even deepening them, until our deficits drive further inflation and then as usual the Dems will come in and clean up the mess. We haven’t had a fiscally responsible Republican president since HW and look what that got him.
Having Elon run wild on expenditure reduction is a possible fix. I read one analysis that said you could get $1T from eliminating grants to state and local government. The counter argument is that those funds would have to be replaced. True for some but even then it puts accountability in the same place as finance and states can't engage the MMT machine. If you want a tax increase, I suggest eliminating the SALT deduction rather than just limiting it. The deduction just exports taxes from high tax jurisdictions to the rest of us. This will also confound the replacement of Federal funds with state funds.
I'm certainly no budget officianado, but can we please cut "defense" already? There must be a minimum of $100B in wasted spending there, if not more.
I'm tired of everyone looking at "discretionary spending" as if that's the yoke around our necks. I get a sense that many defense contractors rely on this money, which also keeps people employed. I get it. However, why should. We be shoveling monies to the Pentagon and defense without opening the damn books?
For example, why should states and cities get cutbacks from federal funding? Not saying that shouldn't be examined, but it's always the same talking point. No one points to "defense" because it's so damn profitable. That's my guess.
Ah yes, one of the first tests of the self-proclaimed “king of debt”. It’s a well earned nickname for the 6 time declarer of bankruptcy. He lived up to the moniker in his first term, setting a record with $8.4 trillion in new debt approved. $5.9 trillion in new spending, $2.5 trillion in tax cuts. Let’s hope he doesn’t actually implement his campaign plans, which called for roughly twice the new debt as Harris, likely breaking his record. Perhaps the biggest test is whether his brethren in the House and Senate care more about fiscal sanity, or cultural grievance. I seem to recall more campaign spending on denigrating fellow Americans than restoring the nations fiscal footing. My bet is on the pet eating side of the equation. It’s so much easier to denigrate the defenseless downtrodden than to make tough trade offs by telling the American people the truth.
How will large increases in tariffs decrease anything? My understanding of tariffs is they increase the price of imports to consumers. That does nothing effect Federal spending. Or, am I missing something?
I read an article by the Council on Foreign Relations (https://www.cfr.org/blog/92-percent-trumps-china-tariff-proceeds-has-gone-bail-out-angry-farmers) that said that 92% of tariff revenue between 2018-2019 went in payouts to farmers who were harmed by the trade consequences, so I'm skeptical of their potential impact on a balanced budget too. I do understand the benefit of having an incentive to manufacture more items domestically, though.
It seems like tariffs won’t help the economy because they won’t. Tariffs are just an attempt at power playing by the incoming oligarchy of criminals, idiots and misfits. This has nothing to do with helping the average American worker/TAXPAYER or small business owners inside the United States (corporate billionaires are shielded from paying their share). This is about corporate corruption & competition in a GLOBAL market & the unchecked power Trump’s incoming oligarchy desperately wants to wield. They are using the American military (our sons and daughters) and worker/consumers to do it. (Notice the defense budget is never questioned.) Anyone expecting some benefit from Trump’s tariffs is about to learn a very painful truth about putting national security and your financial fate in the hands of corrupt, unqualified billionaires.
Letting the tax cuts expire just adds to the destruction of the middle and lower classes. If you don’t own a home and have a mortgage you can’t itemize (under the prior rules you couldn’t meet the threshold). Most middle and lower class people who don’t own a home saw their tax burden fall. In our case, it was cut in half.
So please explain how returning to the old rules is going to help millions similarly situated, where our taxes go up by (in our case) 100%.
Good try, Oren. Eminently sensible. Unfortunately, the tiger that the GOP has now ridden back into office won't be headed in that direction. The consistent failure of imagination regarding Trump on the left is matched only by the failure of imagination on the remaining sober right. Trump has been ranting about tariffs for 40 years. He needs to prove himself right. Not at all incidentally, tariffs also provide him with a way to reward corporate cronies and strike at corporate "enemies within". Meanwhile, HE sees the tax cuts of 2017 as a magnificent legacy and testimony to his infinite greatness. He will push very hard for their extension and decry bedwetters, though the vocabulary of choice will be "traitors". Because he has been "proven totally right" regarding all his other contradictory and chaotic intuitions by his "landslide" slaughter of the opposition, I don't think he's likely to enter a self-questioning mode of mind in the immediate future. Also see prior comment from Karl about his lifetime as king of debt. Aligning the concepts "fiscal conservatism" and "President Trump" is like trying to put together the positive poles on two supermagnets.
The paradox is that sometimes the effects of fiscal austerity can create larger deficits by slowing economic activity, and activating higher spending from the automatic stabilisers. The key is not the deficit per se, but whether the government expenditures enhance the economy's productive potential
We will not do it. If Republicans were to propose what is outlined here, Democrats would instantly accuse us of trying to throw grandma off a cliff and starve black children. And the press would eat it up because Orange-Man-Hitler. The Congress-critters all know what's coming finanically, but Georgetown cocktail parties are more fun than legislating. And let's face it, Ponzi schemes (which is what our so-called budget is) are a blast until right before they're not.
Personally, we moved about 30% of our IRAs into foreign currency CDs about 15 years ago when the Fed started its QE program. We've actually lost about 10% on those over the last 15 years, even during COVID the inflation problem was essentially global. But I've long expected Congressional inaction until something very bad happens and they don't have a choice. To be clear, "very bad" means a Liz Truss style bond run on the US Treasury or a major strategic military defeat.
I really hope I'm wrong, but I think we're a long way from getting our fiscal house in order. And I certainly don't think Donald Trump has the attention span to do it.
Thank you for your analysis. I don’t think there’s a nuanced bone in Trump’s body, and I think Elon (the designated budget guru) has much in the way of a nuance gene either. You’re talking reality and you’re rational. It remains to be seen if there are any adults with any say at this point.
In the world of engineering, when folks were trying to solve a manufacturing problem without being willing to totally accept all facts and numbers, you would often get to a place with an arrow pointing and the caption “magic happens here.“
I guess this way of thinking isn't just limited to industry.
You seem pretty reality based and like you have some integrity. Why are you falling into the eternal conservative think tanker trap of wish casting that elected Republicans aren't 100% fact free zealots or slavering supplicants (in public, where it matters) to fact free zealots? The chance that the GOP will agree to a single meaningful tax increase rounds to zero at the nearest thousandth. 19% of GDP? 😆😆😆😆😆😆😆😆😆😆😆😆
Also, outside the pandemic, my entire adult life has been the democrats negotiating with the GOP for not as big tax cuts and not as big spending cuts as the zealots demand. It's deeply dishonest (self deluding?) to both sides it as democrats never agree to any spending cuts the same way Republicans never agree to tax increases.
Growth is the only way we are going to address income inequality and our underclass. Addressing the budget is a moral argument and needs to be presented as such. Not sure about the commission phobia, wasn't Simpson-Bowles successful?
" what’s good for multinational corporations is not necessary good for America. "
And yet JD Vance is also publicly threatening NATO if the EU continues to regulate Twitter. So clearly some corporations to whom some people owe huge favors, are going to be treated as if they are good for America.
Additionally it is worth noting that Trump routinely promised to roll-back Biden's efforts to crack down on tax dodging by reducing the size of the IRS and rolling back the inflation reduction act. So the plan is not only to cut taxes but to cut collections drastically at which point we get into a hole even if they do not add "new" tax cuts.
They are goimg to crash the economy and destroy the country because they are too stupid and prideful to admit that they are wrong.
It’s hilarious to me to think that the GOP actually cares about deficits or will do anything about them. It’s a good cudgel for attacking Dems but their record in office makes it quite clear that given the chance the GOP will cut taxes but not spending (because that makes people mad, and above all Trump wants people to like him). I hope I’m wrong about this, but I expect the Republicans in congress will go along with extending tax cuts, maybe even deepening them, until our deficits drive further inflation and then as usual the Dems will come in and clean up the mess. We haven’t had a fiscally responsible Republican president since HW and look what that got him.
Having Elon run wild on expenditure reduction is a possible fix. I read one analysis that said you could get $1T from eliminating grants to state and local government. The counter argument is that those funds would have to be replaced. True for some but even then it puts accountability in the same place as finance and states can't engage the MMT machine. If you want a tax increase, I suggest eliminating the SALT deduction rather than just limiting it. The deduction just exports taxes from high tax jurisdictions to the rest of us. This will also confound the replacement of Federal funds with state funds.
We can cut $2t by stop issuing T-Bills.
I'm certainly no budget officianado, but can we please cut "defense" already? There must be a minimum of $100B in wasted spending there, if not more.
I'm tired of everyone looking at "discretionary spending" as if that's the yoke around our necks. I get a sense that many defense contractors rely on this money, which also keeps people employed. I get it. However, why should. We be shoveling monies to the Pentagon and defense without opening the damn books?
For example, why should states and cities get cutbacks from federal funding? Not saying that shouldn't be examined, but it's always the same talking point. No one points to "defense" because it's so damn profitable. That's my guess.
Ah yes, one of the first tests of the self-proclaimed “king of debt”. It’s a well earned nickname for the 6 time declarer of bankruptcy. He lived up to the moniker in his first term, setting a record with $8.4 trillion in new debt approved. $5.9 trillion in new spending, $2.5 trillion in tax cuts. Let’s hope he doesn’t actually implement his campaign plans, which called for roughly twice the new debt as Harris, likely breaking his record. Perhaps the biggest test is whether his brethren in the House and Senate care more about fiscal sanity, or cultural grievance. I seem to recall more campaign spending on denigrating fellow Americans than restoring the nations fiscal footing. My bet is on the pet eating side of the equation. It’s so much easier to denigrate the defenseless downtrodden than to make tough trade offs by telling the American people the truth.
How will large increases in tariffs decrease anything? My understanding of tariffs is they increase the price of imports to consumers. That does nothing effect Federal spending. Or, am I missing something?
I read an article by the Council on Foreign Relations (https://www.cfr.org/blog/92-percent-trumps-china-tariff-proceeds-has-gone-bail-out-angry-farmers) that said that 92% of tariff revenue between 2018-2019 went in payouts to farmers who were harmed by the trade consequences, so I'm skeptical of their potential impact on a balanced budget too. I do understand the benefit of having an incentive to manufacture more items domestically, though.
It seems like tariffs won’t help the economy because they won’t. Tariffs are just an attempt at power playing by the incoming oligarchy of criminals, idiots and misfits. This has nothing to do with helping the average American worker/TAXPAYER or small business owners inside the United States (corporate billionaires are shielded from paying their share). This is about corporate corruption & competition in a GLOBAL market & the unchecked power Trump’s incoming oligarchy desperately wants to wield. They are using the American military (our sons and daughters) and worker/consumers to do it. (Notice the defense budget is never questioned.) Anyone expecting some benefit from Trump’s tariffs is about to learn a very painful truth about putting national security and your financial fate in the hands of corrupt, unqualified billionaires.
Letting the tax cuts expire just adds to the destruction of the middle and lower classes. If you don’t own a home and have a mortgage you can’t itemize (under the prior rules you couldn’t meet the threshold). Most middle and lower class people who don’t own a home saw their tax burden fall. In our case, it was cut in half.
So please explain how returning to the old rules is going to help millions similarly situated, where our taxes go up by (in our case) 100%.
I’ll wait.
Good try, Oren. Eminently sensible. Unfortunately, the tiger that the GOP has now ridden back into office won't be headed in that direction. The consistent failure of imagination regarding Trump on the left is matched only by the failure of imagination on the remaining sober right. Trump has been ranting about tariffs for 40 years. He needs to prove himself right. Not at all incidentally, tariffs also provide him with a way to reward corporate cronies and strike at corporate "enemies within". Meanwhile, HE sees the tax cuts of 2017 as a magnificent legacy and testimony to his infinite greatness. He will push very hard for their extension and decry bedwetters, though the vocabulary of choice will be "traitors". Because he has been "proven totally right" regarding all his other contradictory and chaotic intuitions by his "landslide" slaughter of the opposition, I don't think he's likely to enter a self-questioning mode of mind in the immediate future. Also see prior comment from Karl about his lifetime as king of debt. Aligning the concepts "fiscal conservatism" and "President Trump" is like trying to put together the positive poles on two supermagnets.
The paradox is that sometimes the effects of fiscal austerity can create larger deficits by slowing economic activity, and activating higher spending from the automatic stabilisers. The key is not the deficit per se, but whether the government expenditures enhance the economy's productive potential
We will not do it. If Republicans were to propose what is outlined here, Democrats would instantly accuse us of trying to throw grandma off a cliff and starve black children. And the press would eat it up because Orange-Man-Hitler. The Congress-critters all know what's coming finanically, but Georgetown cocktail parties are more fun than legislating. And let's face it, Ponzi schemes (which is what our so-called budget is) are a blast until right before they're not.
Personally, we moved about 30% of our IRAs into foreign currency CDs about 15 years ago when the Fed started its QE program. We've actually lost about 10% on those over the last 15 years, even during COVID the inflation problem was essentially global. But I've long expected Congressional inaction until something very bad happens and they don't have a choice. To be clear, "very bad" means a Liz Truss style bond run on the US Treasury or a major strategic military defeat.
I really hope I'm wrong, but I think we're a long way from getting our fiscal house in order. And I certainly don't think Donald Trump has the attention span to do it.
Let's get busy and get it done. Put new tax codes into place,which are long overdue.
Paying 13% of the budget for deficit is insane. Quit borrowing money for G sake!
Thank you for your analysis. I don’t think there’s a nuanced bone in Trump’s body, and I think Elon (the designated budget guru) has much in the way of a nuance gene either. You’re talking reality and you’re rational. It remains to be seen if there are any adults with any say at this point.
Please name one currently-serving Democrat who supports a 20-21 % cap on federal spending as a percent of GDP.
In the world of engineering, when folks were trying to solve a manufacturing problem without being willing to totally accept all facts and numbers, you would often get to a place with an arrow pointing and the caption “magic happens here.“
I guess this way of thinking isn't just limited to industry.
You seem pretty reality based and like you have some integrity. Why are you falling into the eternal conservative think tanker trap of wish casting that elected Republicans aren't 100% fact free zealots or slavering supplicants (in public, where it matters) to fact free zealots? The chance that the GOP will agree to a single meaningful tax increase rounds to zero at the nearest thousandth. 19% of GDP? 😆😆😆😆😆😆😆😆😆😆😆😆
Also, outside the pandemic, my entire adult life has been the democrats negotiating with the GOP for not as big tax cuts and not as big spending cuts as the zealots demand. It's deeply dishonest (self deluding?) to both sides it as democrats never agree to any spending cuts the same way Republicans never agree to tax increases.
Growth is the only way we are going to address income inequality and our underclass. Addressing the budget is a moral argument and needs to be presented as such. Not sure about the commission phobia, wasn't Simpson-Bowles successful?