Here’s a forecast.
On cnbc interview, Treasury secretary says GDP will grow faster than debt.
I feel like I’ve heard this story before.
Anyone want to agree with that forecast?
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I suggest you look at the Presidents first term for an answer. Because that was when these tax cuts were introduced. Making them permanent should give us the same results.
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Rather than arguing with this prediction, the right question, is growth at any cost is worth pursuing? Why this red hot economy needs further help for growth?
If you keep spending and increasing the deficit during good times, what will you do/ what can you do during times of economic trouble?
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The same, but blame the bad times on someone else.
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Over my decades working for several “JCs”, I learned that every report I wrote, every comment I made, MUST align with what the “JCs” wanted to hear, regardless of facts, or there would be consequences.
I have been watching a documentary over the last few days. This bit may be relevant to recent reports that “jobs are better than expected”, “the economy is better than expected”, “inflation is better than expected”, and so on.
(apologies for the sound quality. shot off my tv screen with my camera)
Steve
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That doesn’t look like a documentary more like a British comedy or play. What is the name of the Documentary?
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Yes, on both questions. “Yes Minister”, and it’s sequel “Yes Prime Minster”. British sitcoms of the early 80s. You can speak the truth, if you dress it up as satire.
Here’s a sample, on public opinion polling.
Steve
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In 9 months or less the corporate tax rate will be raised substantially? If so then it is true.
The Democrats have ceded the discussion.
That tax bill took effect at the beginning of 2018. Since then the US has had an average annual GDP growth rate of 2.5% (including the covid shutdown). Is that enough to grow faster than debt?
DB2
So you are grasping at straws, counting the pennies, to see if you can belly up to the bar for one last shot of whiskey?
You have control of all the branches of the government. The debt is your problem now. Don’t come back and complain about it after this fiasco because nobody will be listening.
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No, that was a legitimate response to your suggestion to look at economic growth under the current tax code. Do you think that a GDP growth rate of 2.5% is enough?
DB2
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I think a GDP growth rate of 2.5% would be enough to stave off a problem with the debt but probably would not solve the problem. Like you said we have had a 2.5% gdp and the debt is still growing. So you would have to have at least 3%. Do you think we can achieve 3%?
The prognostication is for GDP to be 1.4% to 1.7%, if that happens, What do you expect the debt to do?
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Long term? Probably not.
Debt will go up. So the discussion has switched over to the GDP/debt ratio.
DB2
Has it? For fiscally conservative people it hasn’t, but for the fiscal liberal people it has always been GDP/Debt ratio. If you find yourself sliding in and out between those two because of elections, well that is not intellectually honest.
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Is that true. I don’t remember reading that 10-15 years ago. Back in 2008 Senator Obama called it “irresponsible” and “unpatriotic” to borrow more money from China and drive up our national debt. No mention of GDP growth.
In 2009 President Obama warned congressional leaders that the rate of government spending was unsustainable with dire economic consequences, and pledged to cut the nation’s deficit in his first term. I don’t remember him talking about growing our way out, but maybe it slipped under the radar.
DB2
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People on the left can be fiscally conservative just like people on the right can be fiscally liberal. What would you call yourself?
Current policy going into law today is fiscally liberal as it will explode debt, even as a ratio to GDP, with all of the associated macroeconomic consequences.
There is no evidence to support a GDP forecast of 3% growth, sustained say over a 2-year policy cycle.
And the consensus economists’ forecasts will not be near 3%.
Current GDP might be more like 1.5%, we’ll get Q2 estimates end of July (and there is a lot of noise from changing trade deficits).
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I’m not sure. The US debt has gone from $21T to $32T, and increase of roughly 50%. Does growth compounding at 2.5% cover that?
Help me out here, my calculator is broken.
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If it did, the debt would not have grown. That has always been the promise of “supply side economics”, that “growth” would be so huge, it would cover the deficits created by the “JC” tax cuts. Hasn’t happened yet. That doesn’t deter the mob from falling for the same sales pitch, over and over.
Lessee…what’s the line on the BBB? $4T handed to the “JCs”, $1T taken away from the poor, and another $3T added to the debt. Yup, same as most of the last 40 years.
Steve
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Mark put together a spreadsheet with different rates. Perhaps he can locate it.
You mean the debt to GDP ratio. The debt would still grow.
DB2
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