Tag: economics
Donald Trump

Trump's Return To Presidency Would Bring Economic Ruin

Following the Eating Pets imbroglio, one would think that undecided voters would have their doubts quelled about how to vote in November. What more is there to say?

This sociopath stood by while his violent mob smashed their way into the Capitol searching for the vice president in order to lynch him for disloyalty. When asked about this later, Trump didn't deny encouraging the attempted murder. He justified the mob.

This would-be autocrat has called for military tribunals to try his critics, promised pardons for the Jan. 6 insurrectionists and cannot focus sufficiently to remember at the end of a sentence what he started to say at the beginning.

Though his supporters perceive him to be strong, he is in fact a weakling looking for approval from the thugs of the world. He will abandon Ukraine to suck up to Vladimir Putin, which will end the war all right, but by a method no American should countenance — surrender.

Kamala Harris, by contrast, is a sane, somewhat-left-of-center Democrat who is making a bid for centrist voters by deep-sixing her Medicare for All dalliance and other 2019 bids for progressive credibility. On the matters over which presidents have the most sway, foreign policy, she is more "conservative" than Trump in that she promises unflinching support of NATO, Ukraine and vigorous U.S. world leadership.

On matters over which she has the least scope of action, domestic policy, she is likely to be thwarted by Republicans in Congress. And this is key: She will not attempt to overrule domestic opposition by unconstitutional means.

A June Washington Post survey found that 61 percent of undecided voters rate the economy as the most important issue in the election, and 50 percent of Americans rated inflation as the top concern for the nation. It's worth bearing in mind that inflation has cooled dramatically since its post-pandemic spike to 9.1 percent in June of 2022. In August, the Consumer Price Index dropped to 2.5 percent, low enough for a Federal Reserve rate cut announced on Wednesday. This soft landing is an accomplishment.

It's also true — though the number of voters who believe this can meet in a closet — that presidents have little ability to bring down inflation. Together with Congress, presidents can contribute to inflation, and both Biden and Trump arguably did that. The massive COVID relief bills passed under Trump and Biden flooded the country with cash.

But the relief packages were thoroughly bipartisan efforts, and who's to say they were even wrong? While some of us thought the American Rescue Plan was too much stimulus considering all that had already been passed, one cannot reasonably argue that providing a backstop to the economy in the face of a 100-year health emergency was an example of wasteful spending.

By 52 to 48, voters think Trump is better positioned to handle the economy as president.

Well, that's bonkers. This is where Trump's gross misbehavior may serve him well. His opponents spend so much time responding to his flagrant lies, unprecedented threats, invitations to violence and crude sexual innuendos that we have little bandwidth to deal with his completely fantastical and absurd policy proposals.

Asked about child care costs, he proposes huge new tariffs (anywhere from 20 to 100 percent tariffs), claiming that they would generate so much free money that it would obliterate the federal deficit and have enough left over to pay for everyone's child care. If a high school debater said something like that, he'd be laughed off the stage.

While presidents can do little to bring down inflation, one thing that pretty much all economists agree upon is that presidents can goose inflation by imposing tariffs. The kind of import taxes Trump envisions, according to the Peterson Institute, would cost the average American household an additional $2,600 a year. Tariffs are taxes (repeat three times).

Harris would be better positioned to make this case if Biden had not maintained so many of the Trump-era tariffs, but at least she isn't proposing a blanket 10 percent tax on imports as Trump is (though sometimes he says 20 percent, or 60% percent for China's goods, and 100 percent on countries that abandon the dollar).

Another Trump idea is to deport millions of illegal immigrants. How would this work? At present, ICE has 20,000 employees, and it is believed that this number is inadequate even to cope with border crossers. How many more ICE agents would be required to hunt down, arrest and deport millions of illegal immigrants? Leaving aside the cruelty of this proposal — the American-citizen children whose parents would be deported, the hardship for people who've grown up here and know no other nation/language, the fear and insecurity legal immigrants would suffer — the costs would be astronomical. Prices of food, hotel stays, restaurant meals and new homes would rise. Plus, the taxes illegal immigrants now pay (including to Social Security and Medicare) would be lost.

Trump's most dangerous tendencies concern flouting the law and using the power of the state against his opponents. But those who think his autocratic appetites are acceptable because he knows how to manage the economy are not paying attention to what he's actually saying.

Mona Charen is policy editor of The Bulwark and host of the "Beg to Differ" podcast. Her new book, Hard Right: The GOP's Drift Toward Extremism, is available now.

Reprinted with permission from Creators.

Ex-Treasury Chief Summers Warns Of 'Worldwide Economic Warfare' If Trump Wins

Ex-Treasury Chief Summers Warns Of 'Worldwide Economic Warfare' If Trump Wins

Lawrence Summers, who served as the 71st Secretary of the Treasury under former President Bill Clinton, warned of “worldwide economic warfare” if Donald Trump implements his policy proposalspolicy proposals, Bloomberg reports.

Summers spoke with Bloomberg Television’s Wall Street Week with David Westin on Friday, describing Trump’s policy ideas as “a prescription for the mother of all stagflations.

According to Bloomberg, Summers’ comments came on the heels of Trump, in a meeting with Republicans on Capitol Hill Thursday, floating “using tariff hikes as a way to pay for some income tax cuts.”

Trump in that meeting “also proposed a minimum 10 percent universal import levy and a punitive rate for China,” Bloomberg reports.

Speaking to Westin on Friday, Summers warned there’s never “been a more inflationary presidential economic policy platform in my lifetime,” comparing the proposal to “George McGovern in 1972.”

Though Summers conceded Trump could be following the time-honored tradition of presidential candidates “not [being] serious about the things they say,” the former Treasury secretary described Trump’s public policy platform as an “irresponsible set of proposals.” Between the former president's economic platform and anti-immigration rhetoric, Summers warned of “more wage inflation pressures” if Trump wins the 2024 election. Such pressures, according to Summers, could force another rate hike by the Federal Reserve.

“This could easily be a prescription for a 10 percent mortgage rate,” Summers said. “… This is really dangerous stuff.”

Trump campaign spokesperson Karoline Leavitt hit back at Summers’ assessment, claiming the former president’s “first-term pro-growth economic policies created record-low mortgage, interest and unemployment rates and made inflation virtually non-existent.”

“Americans can expect President Trump’s second-term economic agenda will have the same impact and end Joe Biden’s inflation crisis that continues to rob working families of thousands of dollars every month,” Leavitt said.

Reprinted with permission from Alternet.

Biden Tax Proposal Provokes Right-Wing Defense Of 'Trickle-Down Economics'

Biden Tax Proposal Provokes Right-Wing Defense Of 'Trickle-Down Economics'

After President Joe Biden called for an end to “trickle-down economics” and promoted a vision of the U.S. in which the wealthy “pay their fair share” of taxes during his March 7 State of the Union address, conservative media figures defended the discredited economic model and decried the president's call to tax the rich.

But experts reacting to Biden's speech noted that the president was correct when he argued that tax cuts for the rich have been a policy failure. Multiple studies examining decades of “trickle-down economics” show that such policies have overwhelmingly benefited the rich.

Biden called for the end of “trickle-down economics” policies that don't help the middle class

During his State of the Union address, Biden laid out a vision of the future in which corporations and wealthy individuals pay “their fair share” of taxes and the U.S. abandons the myth of “trickle-down economics.”

“I want to talk about the future of possibilities that we can build together. A future where the days of trickle-down economics are over, and the wealthy and the biggest corporations no longer get all the tax breaks.”

Biden added: “I grew up in a home where trickle-down economics didn’t put much on my dad’s kitchen table. That’s why I determined to turn things around, so the middle class does well. When they do well, the poor have a way up, and the wealthy still do very well. We all do well.”

Later in the speech, Biden called on Congress to “make the tax code fair” by making “big corporations, the very wealthy, finally begin to pay their fair share.” Biden emphasized that making the wealthy and corporations pay their fair share of taxes is vital to “the question of fundamental fairness for all Americans.”

He called out the Trump administration, which “enacted a $2 trillion tax cut, overwhelmingly benefit[ing] the top 1% — the very wealthy and the biggest corporations — and exploded the federal deficit.”

Biden also called for raising the corporate minimum tax rate “to at least 21%” and for a “minimum tax for billionaires at 25%.”

Economic research backs up Biden's criticism of failed “trickle-down” policies

Experts at the Center on Budget and Policy Priorities validated the president’s critique of tax breaks for the wealthy — especially those created by Trump’s unpopular 2017 legislation, officially known as the Tax Cuts and Jobs Act.

Chuck Marr, CBPP's vice president of federal tax policy, noted: “As President Biden is highlighting, the Trump tax law was skewed to the rich, was extremely expensive, and failed to trickle-down.”

Marr added: “The corporate tax rate cut is Exhibit A: the benefits went to executives, not workers.”

CBPP President Sharon Parrott posted: “The President is right. We need to raise revenues on high income households and corporations to make high-value investments in people, communities, and the economy and to improve our fiscal outlook.”

Center for Economic and Policy Research senior economist Dean Baker noted during the speech that “Republicans are upset that Biden has made taxes mandatory for the rich, not just ordinary people.”

The official CEPR account on X also explained that the wealthiest Americans have already stopped paying taxes into Social Security for this year, because the payroll tax does not apply on income above $168,600.

“Millionaires stopped paying into #SocialSecurity 5 days ago,” the post read. “We’re glad @POTUS called out the rigged tax system, which puts the burden of paying for #SocialSecurity on working-class people. #ScrapTheCap so the rich pay their fair share.”

Melissa Boteach, vice president for income security and child care at the National Women’s Law Center, posted that Biden was “hitting it out of the park on tax fairness. Policies to #taxtherich are fundamental to investing in our families and are HUGELY popular across” political parties.

“Trickle-down economics” has further enriched the wealthy and increased national debt

  • A 2012 Congressional Research Service report, which analyzed tax cuts for the rich since 1945, concluded that tax cuts for the wealthy don’t stimulate economic growth. A September 2012 report from the nonpartisan Congressional Research Service determined that “changes over the past 65 years to the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth,” adding, “The top tax rates appear to have little or no relation to the size of the economic pie.” The report further concluded that these tax cuts served to exacerbate economic inequality, stating that ”top tax rate reductions appear to be associated with increasing concentrations of income at the top of the income distribution." The CRS report dealt such a heavy blow to trickle-down economic orthodoxy that Senate Republicans fought to suppress the report's findings. The report was eventually revised and re-released months later and featured most of the same conclusions. [Congressional Research Service, 9/14/12, 12/12/12; The New York Times, 11/1/12; NBC News, 12/13/12]
  • A 2020 study analyzed the effects of tax cuts for the rich spanning “five decades in 18 wealthy nations” and found that “the rich got richer and there was no meaningful effect on unemployment or economic growth.” Researchers at The London School of Economics and Political Science published a working paper in 2020 analyzing the tax regimes of 18 major developed economies that concluded that “major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income.” In a later interview with LSE’s economics blog, one of the researchers who conducted the study added: “Our results align pretty closely with some work from Thomas Piketty, that would suggest that what happens if you cut taxes on the rich is that they then bargain more aggressively for their own compensation at the direct expense of workers lower down the income distribution.” [LSE International Inequalities Institute, December 2020; The London School of Economics, 1/24/23]
  • A new study of Trump's 2017 tax cuts for the rich found it produced wage gains far below what was promised and that, instead of paying for itself as Republicans promised, it added “more than $100 billion a year” to the national debt. The New York Times reported that the study “found the cuts delivered wage gains that were ‘an order of magnitude below’ what Trump officials predicted: about $750 per worker per year on average over the long run, compared to promises of $4,000 to $9,000 per worker.” [The New York Times, 3/4/24; National Bureau of Economic Research, March 2024]
  • Economists predicted in 2016 that Trump's “nonsense … supply-side, trickle-down economics” would do nothing to help the economy. After Trump unveiled his tax and economic policy proposals in August 2016, economists and tax policy experts from across the political spectrum slammed his plan. Former Labor Secretary Robert Reich dismissed Trump's plan as the “normal nonsense of supply-side, trickle-down economics” characteristic of Republican politicians. Conservative tax analyst Ryan Ellis noted that Trump’s proposed deduction for child-care expenses “would provide no benefit to low income workers and single parents who are unlikely to have any tax liability to begin with.” University of Michigan economist Betsey Stevenson posted that “Trump's economic plan focuses in on those he thinks need the most help: the 540 billionaires in the U.S.” [Media Matters, 8/9/16]

Right-wing media responded by defending failed tax cut policies and rejecting Biden’s take
    • Fox & Friends First co-host Todd Piro: “The dirty little secret” is “if you tax corporations more, jobs will go away.” Pirro continued: “At the end of the day, corporations are going to hit that number … whether it comes through increased output or at the sake of you and our jobs.” Pirro also dismissed “the typical tropes of tax the rich, who, in reality, pay most if not close to all of the taxes in this country.” Fox financial contributor Cheryl Casone interjected, “50%.” [Fox News, Fox & Friends First, 3/8/24]
    • National Review senior writer Noah Rothman defended “trickle-down economics” from Biden’s critique. National Review posted on X (formerly known as Twitter): “@NoahCRothman: Biden indicts ‘trickle-down economics’ because it did little to help his family when he was growing up. But Biden grew up in the 1950s and early 60s, when the top marginal tax rates approached 50%. Which is to say that Joe Biden did not, in fact, grow up during a period typified by ‘trickle-down economics.’” [Twitter/X, 3/7/24]
    • National Review senior writer Dan McLaughlin: “Biden’s rants against ‘trickle down economics’ have not changed a whit since he was singing this tune throughout the Reagan years, railing against growth and prosperity.” [Twitter/X, 3/7/24]
    • Fox Business host Charles Payne: “The top 1.0% pay almost 50% of income taxes...what is fair? What is punitive? It’s all deflection from runaway spending.” [Twitter/X, 3/7/24]
    • Fox & Friends co-host Brian Kilmeade: “Love the class warfare…let’s simplify the tax code to make Americans hate rich people …what a unifier!!…lets make rich people pay more to taxes so they can stop hiring people and buying buildings, cars, planes and give to charities.” [Twitter/X, 3/7/24]
    • Committee to Unleash Prosperity President Phil Kerpen: “The tax share of the rich is by far the highest it has ever been under the Trump tax cuts. Biden's tax hikes will harm the economy and reduce the share paid by the rich. It happens every time.” [Twitter/X, 3/7/24]

    Reprinted with permission from Media Matters.

    Now We Can Name (And Blame) Those 'Economic Terrorists' In Congress

    Now We Can Name (And Blame) Those 'Economic Terrorists' In Congress

    In late 2011, John Oliver and his Daily Show cameraman made a trek to my office, then in Providence, Rhode Island, to take me to task. I had recently referred to the Tea Partiers who had pushed America to the brink of a disastrous default as "economic terrorists."

    Oliver had apparently swallowed whole a series of barbs directed my way by a Wall Street Journal blogger who didn't seem to like women much. The blogger kept calling me the "Civility diva" and a "Baroness Catherine Ashton lookalike." (A member of the British parliament, Ashton was said to be homely.) He was quite the wit.

    The blogger found what he thought was more ammo in learning that I was head of a journalistic organization then formulating something called a "civility project." The mission was to debate what made honest opinion writing — not to censure robust, withering commentary. The blogger obviously didn't inquire.

    Nor did The Daily Show. The interview featured Oliver repeatedly blurting a bleeped-out "F" word, followed by canned laughter, followed by a shot of me supposedly looking shocked. It was on that level.

    I was not alone in applying the "economic terrorist" label to a group taking the economy hostage, and mainly because a Democrat, Barack Obama, was president. The New York Times' Thomas Friedman, for one, made references to the Republican "Hezbollah faction" taking the GOP on a "suicide mission."

    We are now 12 years on, and it is gratifying to see a headline in the Times reading, "Don't Try to Appease Economic Terrorists." Economist Paul Krugman was pointing at the new team of Republican extremists threatening the full faith and credit of the United States and, by extension, the world economy.

    Then as now, the vote to raise the debt ceiling has nothing to do with enabling federal spending. It's about making good on the debt already incurred.

    Note that under Donald Trump, Democrats quietly voted for raising the debt ceiling year after year. This was despite a Trump tax cut that tacked about $2 trillion onto the federal deficit and Trump's signing almost $3 trillion in new spending — and that was before COVID even hit.

    Twelve years ago, an economic cataclysm was averted at the last minute, but the terrorists had still wrought terrible damage. The spectacle of a major political party putting into question America's willingness to meet its debt obligations astounded the planet, prompting Standard & Poor's to take away America's triple-A rating for the first time in history. The Republican stunt cost the U.S. Treasury, that is, we taxpayers, at least $19 billion in higher interest costs.

    The final vote, covered live on TV, was unforgettable viewing. There was that famous split screen. On one side you saw Congress casting its votes. On the other, you saw the stock values simultaneously cratering as the political horror show continued without a clear outcome.

    Given the Republican barfight to choose a House speaker, one holds little hope of a peaceful vote to raise the debt ceiling. Speaker Kevin McCarthy tries to look sane when he calls for negotiations. But what does he want to negotiate? Whether America will default on its debt. And why? Because a Democrat is again president.

    The voters may not thank Republicans for putting them through another trauma. In the 2012 election, Obama won a second term, and his party gained two seats in the Senate and eight in the House.

    People who threaten to blow up an airplane if their political demands aren't met are political terrorists. People who threaten to blow up the economy if their demands aren't met are economic terrorists. Let's not be shy about calling them such.

    Reprinted with permission from Creators.

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