Billionaire Michael Bloomberg condemns GOP tax bill: CEOs like me "don't need the money"

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Michael Bloomberg, the billionaire CEO of Bloomberg LP and the former mayor of NYC worth around $50 billion (at least 13x wealthier than President Trump), wrote an absolutely beautiful op-ed condemning the awful GOP tax bill.

Here's a link to the op-ed:
https://www.bloomberg.com/view/articles/2017-12-15...

Last month a Wall Street Journal editor asked a room full of CEOs to raise their hands if the corporate tax cut being considered in Congress would lead them to invest more. Very few hands went up. Attending was Gary Cohn, President Donald Trump's economic adviser and a friend of mine. He asked: "Why aren't the other hands up?"Allow me to answer that: We don't need the money.

Corporations are sitting on a record amount of cash reserves: nearly $2.3 trillion. That figure has been climbing steadily since the recession ended in 2009, and it's now double what it was in 2001. The reason CEOs aren't investing more of their liquid assets has little to do with the tax rate.

CEOs aren't waiting on a tax cut to "jump-start the economy" -- a favorite phrase of politicians who have never run a company -- or to hand out raises. It's pure fantasy to think that the tax bill will lead to significantly higher wages and growth, as Republicans have promised. Had Congress actually listened to executives, or economists who study these issues carefully, it might have realized that.

Instead, Congress did what it always does: It put politics first. After spending the first nine months of the year trying to jam through a repeal of Obamacare without holding hearings, heeding independent analysis or seeking Democratic input, Republicans took the same approach to tax "reform" -- and it shows.

The Treasury Department claimed to have more than 100 professional staffers "working around the clock" to analyze the tax cut. If true, their hard work must have been suppressed. The flimsy one-page analysis Treasury released -- which accepts the White House's reality-defying economic projections in order to claim that the tax cuts will pay for themselves and then some -- is a politically driven document that amounts to economic malpractice. So does the bill itself.

The largest economic challenges we face include a skills crisis that our public schools are not addressing, crumbling infrastructure that imperils our global competitiveness, wage stagnation coupled with growing wealth inequality, and rising deficits that will worsen as more baby boomers retire.

The tax bill does nothing to address these challenges. In fact, it makes each of them worse.

EDUCATION: The bill, by limiting the deduction for state and local taxes, will make it harder for the localities to raise money for education. The burden will fall heaviest on cities with poor students, making it harder for millions of children to escape from poverty -- and leaving more and more businesses with fewer qualified job applicants.

INFRASTRUCTURE: Restricting state and local tax deductions will also mean less local investment for infrastructure, and by raising deficits, the bill will constrain federal infrastructure spending. Our airports, railways and roads are in desperate need of modernization, and our energy grids are vulnerable and inefficient. Yet spending on those and other needs, which acts as a catalyst for private investment, will become more difficult.

INEQUALITY: If Congress wanted to raise real wages and reward work, there is a simple and proven way to do it: expand the earned income tax credit. Instead, it seems to believe that lower corporate tax rates will magically lead to higher wages, which fundamentally misunderstands how labor markets work.

In addition, by eliminating the requirement that individuals buy health insurance, many young and healthy people will drop out of the marketplace, causing health insurance premiums to rise for everyone else. This is nothing more than a backdoor tax increase on health care for millions of middle-class families that will leave them with less disposable income for savings, investment and spending.

DEFICITS: The bill's cost -- $1 trillion to $1.5 trillion -- makes it more difficult for taxpayers to afford Medicare and Social Security for the baby boom generation, which is now hitting retirement. Republicans didn't grapple with those costs. Instead, they kicked the can down the road. Ignoring the bill's price tag, or pretending we needn't worry about deficits, is like ignoring climate change or pretending we needn't worry about its effects. I'll say one thing for Republicans in Congress: They're consistent.

In effect, the tax bill achieves four main things:

It takes money away from schools and students.
It restricts our ability to invest in infrastructure.
It does nothing to boost real wages while making health insurance more expensive.
It makes it harder to control the costs of Medicare and Social Security without cutting defense and other spending -- or further exploding the deficit.
To what end? To hand corporations big tax cuts they don't need, while lowering the tax rate paid by those of us in the top bracket, and allowing the wealthy to shelter more of their estates.

Thoughts?

Comments (66)

Dec 20, 2017

The estimates put households with income levels of $100k+ as resulting in 2% more money from the cuts. Since this population represents roughly 20% it could unlock 143b every year in consumer spending. Most families would see an extra 2k and so you're talking about hundreds of billions more each year.

The insurance mandate is trash because it's not worth it to let the government take money out of your tax refund for not having health insurance to go through the trouble of signing up. That's the reason why health costs have skyrocketed.

The only part I agree with is that I don't think corporations needed a cut and I'm skeptical that those business cuts will pay for the reduction in revenue.

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Dec 20, 2017

My first thought is that instead of spamming an article and asking for "thoughts?", how about you start an OP with some of your own thoughts to get a discussion going.

Other than that there are a number of things that I disagree with in this article. The corporate tax rate was far too uncompetitive and 21% is okay right now. OTOH, the GOP shot itself in the foot by lowering the highest individual income tax rate to 37%. No way it should have gone down, and I could have seen it going up a point or two in fairness, but the GOP simply can't help itself.

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Best Response
Dec 21, 2017

Explain to me how the GOP shot itself in the foot by lowering taxes for everyone? And how is raising taxes for those that already pay the majority of taxes, "fair"? That is such a subjective term, what is "fair", and who gets to decide what is and isn't "fair"?

Here's an idea, give the money back to the people that earned it, and let them decide what to do with it. An individual who actually earned their income is a much better allocator of capital than the government, who has zero incentive to operate efficiently. If you think your taxes are too low and you aren't contributing your "fair" share, then by all means feel free to write a check to the IRS.

And to those that say that corporations didn't need the tax cut, we now have brought our corporate tax rate in line with the rest of the world. You also have had Boeing, AT&T, Wells Fargo, and FifthThird all already say they're either paying bonuses or raising wages because of the corporate tax cuts. Seems like a pretty good deal to me. And for anyone complaining about corporations receiving all the benefits, how does your 401K look over the past 12 months?

Finally, I think the removal of the SALT deduction is brilliant, and I'm personally getting hammered by it. High tax areas like New York and California have had ZERO incentive to operate efficiently, since any raise in local taxes was done on the back of federal income taxes since it was simply deducted. Now that high local taxes will actually have an impact on democrat constituents, they hopefully will put pressure on politicians in these areas to lower local taxes - there was zero incentive to do so before.

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Dec 21, 2017

The concern over the corporate tax cut is that it will cause the deficit to rise unless economic activity outpaces the falling revenue. Because the consumer will see higher incomes, which could mask the corporate loss in revenue enough to where the deficit falls, it's a well balanced plan and the best one we could've got. We're in a good spot to do it, with growth behind our backs so this plan could be healthy with its current structure. Just worried we don't get the growth anticipated.

    • 1
Dec 21, 2017

Its a fair concern. I think we also have to tackle/cut the cost side as well.

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Dec 21, 2017
m8:

Explain to me how the GOP shot itself in the foot by lowering taxes for everyone? And how is raising taxes for those that already pay the majority of taxes, "fair"? That is such a subjective term, what is "fair", and who gets to decide what is and isn't "fair"?

I'll take the bait and offer a contrarian view. The federal income tax is exactly that, a tax on income. You cannot evaluate tax contribution in a vacuum separate from income distribution. I'm not insinuating you're doing that here, but I see it happen fairly often, and it creates a misleading, attention-grabbing headline. As of 2015, the top 1% and top 25% of earners pay less in total taxes relative to their share of total income then they did during the golden years of Reagonomics. All of this data is available on the Tax foundations website, and it's worth taking a look at.

m8:

Here's an idea, give the money back to the people that earned it, and let them decide what to do with it. An individual who actually earned their income is a much better allocator of capital than the government, who has zero incentive to operate efficiently. If you think your taxes are too low and you aren't contributing your "fair" share, then by all means feel free to write a check to the IRS.

This is a fairly standard libertarian principle. It doesn't resonant with me, but I understand the appeal. It totally ignores the question though of where the spending offsets should be levied.

No surprise, Congress has ignored this problem as well. The federal deficit in 2017 is nearly 700 billion, or 75% higher than the deficit that was run under a Democractic President in 2015. Half of the federal disaster funding is still suppose to be appropriated in 2019 and this is in addition to the 280 billion of front-loaded tax cuts scheduled to occur in 2019. On top of this, Ryan is making a push to increase defense spending by $75 billion per year. When Obama was being denounced for his runaway spending the total government outlays were 3.85 trillion. Based on CBO's latest baseline projections, the total government outlays in 2019 are projected at 4.573 trillion. Mind you, this is a year in which federal revenue will fall by roughly 280 billion due to tax cuts and outlays are projected to increase by 20%. Where is the financial rectitude? It seems to me the government is projected to appropriate more money than ever, while drastically decreasing its coffers in the process. It does not align with the principles you are espousing.

m8:

And to those that say that corporations didn't need the tax cut, we now have brought our corporate tax rate in line with the rest of the world. You also have had Boeing, AT&T, Wells Fargo, and FifthThird all already say they're either paying bonuses or raising wages because of the corporate tax cuts. Seems like a pretty good deal to me. And for anyone complaining about corporations receiving all the benefits, how does your 401K look over the past 12 months?

This is based on the statutory rate, and not what corporations actually pay. The array of targeted tax breaks and loopholes that are allowed bring the effective tax rate down to a much more equitable comparison with other G-7 companies. These loopholes that were suppose to be removed in tandem with lowering the corporate rate were not. Of the ~250 JCT tax expenditure that are allowed, only one of them is getting removed.

Because of ZIRP and 8 years of monetary stimulus via QE, corporations are flush with cash. Debt issuances are 165% higher than pre-crisis borrowing while capex in plant, equipment, and technology is still 35% lower than it was in 2000. Companies are not investing their cash in a way that lifts the real economy, it's been stock buybacks and dividends. I'm glad to see some major companies have been extending the benefits to employees, I hope they continue to do so, but I remain suspect and eager to be proved wrong.

I don't doubt these gains in the S&P have been good for you and a lot of other people on here, including myself. But, less than 50% of Americans own any actual stocks either directly or indirectly via a retirement savings account. Furthermore, the top 20% of own 92% of Americans stock holdings. The diffusion of benefits that occur from a gain in the stock market are much more concentrated than most people realize.

m8:

Finally, I think the removal of the SALT deduction is brilliant, and I'm personally getting hammered by it. High tax areas like New York and California have had ZERO incentive to operate efficiently, since any raise in local taxes was done on the back of federal income taxes since it was simply deducted. Now that high local taxes will actually have an impact on democrat constituents, they hopefully will put pressure on politicians in these areas to lower local taxes - there was zero incentive to do so before.

Lastly, the states with income taxes are significantly less reliant on the federal bank roll. If you prefer no government to small government, and small government to big government, wouldn't you rather the state appropriate funds from its constituents versus having the federal government do that?. Government closer to the people is better, no?

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Dec 21, 2017

In 2017, the top 20% income earners accounted for 95% of total tax revenue (but only accounted for ~60% of total income).

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Dec 21, 2017

This is based on nothing more than an extemporaneous quote from Mulvaney during a college Q&A session. There has been no public data made available to corroborate its validity. If so, provide it and I'll gladly take a look and concede the point.

Unless you think that politicians are incapable of lying, misleading, or aggrandizing in order to sway an audience.

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Dec 21, 2017

So what if the number were 20% paid 80%? Would that make a material difference to your position?

Aug 13, 2018
real_Skankhunt42:

So what if the number were 20% paid 80%? Would that make a material difference to your position?

Good point. That's actually the point of a graduated tax system...the folks at the top are getting more out of the system in every possible metric. Thus they pay more.

Aug 13, 2018
Schreckstoff:
m8:

Explain to me how the GOP shot itself in the foot by lowering taxes for everyone? And how is raising taxes for those that already pay the majority of taxes, "fair"? That is such a subjective term, what is "fair", and who gets to decide what is and isn't "fair"?

I'll take the bait and offer a contrarian view. The federal income tax is exactly that, a tax on income. You cannot evaluate tax contribution in a vacuum separate from income distribution. I'm not insinuating you're doing that here, but I see it happen fairly often, and it creates a misleading, attention-grabbing headline. As of 2015, the top 1% and top 25% of earners pay less in total taxes relative to their share of total income then they did during the golden years of Reagonomics. All of this data is available on the Tax foundations website, and it's worth taking a look at.

m8:

Here's an idea, give the money back to the people that earned it, and let them decide what to do with it. An individual who actually earned their income is a much better allocator of capital than the government, who has zero incentive to operate efficiently. If you think your taxes are too low and you aren't contributing your "fair" share, then by all means feel free to write a check to the IRS.

This is a fairly standard libertarian principle. It doesn't resonant with me, but I understand the appeal. It totally ignores the question though of where the spending offsets should be levied.

No surprise, Congress has ignored this problem as well. The federal deficit in 2017 is nearly 700 billion, or 75% higher than the deficit that was run under a Democractic President in 2015. Half of the federal disaster funding is still suppose to be appropriated in 2019 and this is in addition to the 280 billion of front-loaded tax cuts scheduled to occur in 2019. On top of this, Ryan is making a push to increase defense spending by $75 billion per year. When Obama was being denounced for his runaway spending the total government outlays were 3.85 trillion. Based on CBO's latest baseline projections, the total government outlays in 2019 are projected at 4.573 trillion. Mind you, this is a year in which federal revenue will fall by roughly 280 billion due to tax cuts and outlays are projected to increase by 20%. Where is the financial rectitude? It seems to me the government is projected to appropriate more money than ever, while drastically decreasing its coffers in the process. It does not align with the principles you are espousing.

m8:

And to those that say that corporations didn't need the tax cut, we now have brought our corporate tax rate in line with the rest of the world. You also have had Boeing, AT&T, Wells Fargo, and FifthThird all already say they're either paying bonuses or raising wages because of the corporate tax cuts. Seems like a pretty good deal to me. And for anyone complaining about corporations receiving all the benefits, how does your 401K look over the past 12 months?

This is based on the statutory rate, and not what corporations actually pay. The array of targeted tax breaks and loopholes that are allowed bring the effective tax rate down to a much more equitable comparison with other G-7 companies. These loopholes that were suppose to be removed in tandem with lowering the corporate rate were not. Of the ~250 JCT tax expenditure that are allowed, only one of them is getting removed.

Because of ZIRP and 8 years of monetary stimulus via QE, corporations are flush with cash. Debt issuances are 165% higher than pre-crisis borrowing while capex in plant, equipment, and technology is still 35% lower than it was in 2000. Companies are not investing their cash in a way that lifts the real economy, it's been stock buybacks and dividends. I'm glad to see some major companies have been extending the benefits to employees, I hope they continue to do so, but I remain suspect and eager to be proved wrong.

I don't doubt these gains in the S&P have been good for you and a lot of other people on here, including myself. But, less than 50% of Americans own any actual stocks either directly or indirectly via a retirement savings account. Furthermore, the top 20% of own 92% of Americans stock holdings. The diffusion of benefits that occur from a gain in the stock market are much more concentrated than most people realize.

m8:

Finally, I think the removal of the SALT deduction is brilliant, and I'm personally getting hammered by it. High tax areas like New York and California have had ZERO incentive to operate efficiently, since any raise in local taxes was done on the back of federal income taxes since it was simply deducted. Now that high local taxes will actually have an impact on democrat constituents, they hopefully will put pressure on politicians in these areas to lower local taxes - there was zero incentive to do so before.

Lastly, the states with income taxes are significantly less reliant on the federal bank roll. If you prefer no government to small government, and small government to big government, wouldn't you rather the state appropriate funds from its constituents versus having the federal government do that?. Government closer to the people is better, no?

The first rule of discussing anything with conservatives is to not expect back any coherent/accurate response. Their whole point of view is committed to conning the masses into voting against their own interests. Once you accept that, then all the nonsense they say fits a predictable patter of obfuscating the truth at every opportunity so their masters can profit off the regular folk.

Innovative argument at the end there, I liked that. The short answer is that conservatives want to cut any and all gov't spending that isn't military. Period. They have no idea how to govern, they just think of the government the way mob bosses think of their made men: they exist to funnel money up to them, and bludgeon anyone who gets in the way of that. Not much else to discuss. You're right on every point. The stated goal of a lot of conservatives is to bankrupt the federal government so they can justify killing social security, Medicare, Medicaid, welfare, the EPA, SEC, Veterans Affairs, even the Fed itself....basically and agency/dept that doesn't serve their business interests.

I mean, they're succeeding lately too. They convince a bunch of country rubes that liberals tax things too much, wholly leaving out that advanced areas use the money to build/maintain a platform that allows vastly more wealth to be created. Example: try creating a banking industry in bumfuck Georgia. There's nothing to support it. So they have a low amount of taxes because they have a low amount of civilization. The cocksuckers that promote this while knowing better, well, they'd be better off shot in the head.

But hey, it doesn't matter what we think. All we have to do is wait for the next blowout. Markets are 100% higher than they were in 2007....they have a LOT further to fall this time and the mess is going to look pretty bad. What better president to lead the country into Bx thank fRUMP hahahaha

Seriously: save your pennies and prepare to buy when the S&P500 is at 500.

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Dec 21, 2017

I'll get back to this with a more detailed post when I have time, but take note about how the original house bill had a top rate of like 38% or 39%, and the original Senate version kept the top rate at 39.6% I think. Then these morons get together and somehow the top rate drops to 37%; these idiots just can't help but make themselves look like they're catering to the top 0.1%.

The GOP is just soooooo bad at optics that it's laughable, when in a sane world they would be able to own the Dems with solid populist messaging and bills that support said messaging. The entire GOP establishment are born losers who are like the Washington Generals to the Dems Harlem Globetrotters. These idiots could barely get this passed by the skin of their teeth. For reference, I also LOVE Trump, but I hate the GOP establishment.

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Dec 22, 2017

The GOP may be bad at optics but they look like geniuses next to this:

"Sen Dianne Feinstein
@SenFeinstein

The Republican tax bill caps the mortgage interest deduction at $750,000 for new mortgages. In California, seven counties have average home prices that are more than $750,000: Alameda, Marin, Orange, San Francisco, San Mateo, Santa Clara and Santa Cruz counties. #GOPTaxScam"

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Dec 23, 2017

Remember when she said "the dogma lives loudly within you" to a Catholic judge candidate named Amy Coney Barret?

She and Maxine Waters are definitely the worst at optics IMO.

Dec 21, 2017

Thought this article would be a crybaby "I hate the republican tax bill rant", but it's actually a mockery of the Democratic party. This bill could fuck them long-term.

Democrats want tax reform because they know that it can beef their pockets up. Yet, they also know it has been red party rhetoric since the 1900s.

Dec 21, 2017

Trump said now that the estate tax is repealed farmers can keep their farms....what a joke. Anyone who supports this is an idiot, unless you're rich(probably no one in this thread)

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Dec 21, 2017

Aside from calling everyone who supports this an idiot - what are your reasons for not supporting the tax cut?

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Dec 21, 2017

Because its just rich ppl getting richer.
Paid for by cuts to programs for poor people.

Why would trump disguise the benefactors of the estate tax repeal by referencing farmers?

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Dec 21, 2017
duey_dun_did_it_again:

Because its just rich ppl getting richer.
Paid for by cuts to programs for poor people.

Why would trump disguise the benefactors of the estate tax repeal by referencing farmers?

Can you name the specific cuts?

Dec 21, 2017

Um the estate tax repeal ?
Um the lowering of the top tax bracket?
Ugh the 20% corporate rate? What poor ppl own corporations? What poor ppl have estates to leave to ppl?

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Dec 21, 2017
duey_dun_did_it_again:

Um the estate tax repeal ?
Um the lowering of the top tax bracket?
Ugh the 20% corporate rate? What poor ppl own corporations? What poor ppl have estates to leave to ppl?

I asked if you could name the specific cuts to the programs for poor people. I will be waiting with bated breath for your response.

Dec 21, 2017

Medicare....social security...??

Dec 21, 2017
duey_dun_did_it_again:

Medicare....social security...??

Yeah, when did that happen?

Dec 21, 2017

Paul Ryan said that's next

Dec 21, 2017
duey_dun_did_it_again:

Paul Ryan said that's next

Paul Ryan said Medicare and SS cuts were next? Did you hear "reform" and assume "cuts"? Depending on the actuarial math, Medicare has a $40-100 trillion unfunded liability, so I don't think a $150 billion/year tax cut is going to be the x-factor that causes Medicare to get cut.

Dec 22, 2017

House Speaker Paul D. Ryan (R-Wis.) said Wednesday that congressional Republicans will aim next year to reduce spending on both federal health care and anti-poverty programs, citing the need to reduce America's deficit.

"We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit," Ryan said during an appearance on Ross Kaminsky's talk radio show. "... Frankly, it's the health care entitlements that are the big drivers of our debt, so we spend more time on the health care entitlements -- because that's really where the problem lies, fiscally speaking."

Ryan said that he believes he has begun convincing President Trump in their private conversations about the need to rein in Medicare, the federal health program that primarily insures the elderly.

From the Washington Post.

Rein in doesnt mean cut according to you.

So we made a tax cut for the rich and we pay for it with cuts to entitlement programs.

Its also just a coincidence that this is what republicans always do.

Dec 22, 2017
duey_dun_did_it_again:

Ryan said that he believes he has begun convincing President Trump in their private conversations about the need to rein in Medicare, the federal health program that primarily insures the elderly.

From the Washington Post.

Rein in doesnt mean cut according to you.

So we made a tax cut for the rich and we pay for it with cuts to entitlement programs.

Its also just a coincidence that this is what republicans always do.

These are COMPLETELY separate topics. Paul Ryan has been talking about entitlement reform about 2 decades prior to the 2016 election. You're making a connection where no connection exists. A $150 billion annual tax cut has zero impact on opening or closing Medicare's $43 trillion unfunded liability.

Aug 13, 2018

Shut the fuck up.

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Dec 21, 2017

Did you even read the article, m8?

Dec 21, 2017

I did, but my comment was directed at "duey_dun_did_it_again".

I liked the article.

Dec 21, 2017

You didn't answer my question.. M8

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Dec 22, 2017

Because you led into your question with 2 false statements, and Dances with Dachshunds has already handled you appropriately.

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Dec 21, 2017

Let's stipulate that Bloomberg is generally correct here for a second - "trickle down" economics don't work - why do we always talk about increasing taxes on wage earners? Why is is so hard for people like Bloomberg to say "we should raise the long term capital gains rate to 40%" and eliminate carried interest"?

Again, let's say he's 100% correct - why does he want the dentist making 400k per year in Cincinnati to pay for all of the tax increases? Bloomberg is successful, I like him, I use his products, and I congratulate him on his success. But the idea that a wage earner rather than capital owner should pay high rates is insane to me, regardless of how you feel about his claims.

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Dec 21, 2017

I'm pretty sure Bloomberg supports taxing capital gains and carried interest as regular income instead of raising taxes on wealthy wage earners.

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Dec 21, 2017

I'm actually glad Trump is getting this victory. This legislation will be inextricably tied to his presidency much like the ACA is to Obama's. When it fails miserably to help the working class people who elected him they'll only be able to blame their misery and hardships on Trump and the Republicans in Congress. They will then realize that the Republican Party doesn't give a fuck about them and will stay home during elections...

Ah who am I kidding they'll probably just find a way to blame Hillary.

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Dec 21, 2017

Here are my thoughts:

  1. This bill is fiscally irresponsible. The GOP can't claim to be the "party of fiscal responsibility" while supporting a bill that would increase the deficit by $1 trillion-$1.5 trillion. There is no proof that the increased economic growth as a result of this tax cut will make up for this massive deficit.
  2. The only part of this bill I approve of is the corporate tax cut. The US has one of the highest corporate tax rates in the world. Actually, this bill doesn't cut the corporate tax enough in my opinion. We should eliminate corporate taxes and pay for it by taxing dividends, capital gains, and carried interest as regular income and closing all offshore loopholes. The corporate tax is a double tax.
  3. Removing the health insurance mandate will increase health care costs. It's a terrible idea.
  4. Eliminating the estate tax is a terrible idea. The estate tax is not a double tax. Rich kids shouldn't be allowed to inherit millions without paying any taxes on it. They didn't earn that money. Repealing the tax will cost us ~$20 billion a year.
  5. The poor and middle class will only see very small tax cuts as a result of this bill. The GOP will probably cut Social Security and Medicare to pay for this tax cut, thus eliminating the small tax cut the poor and middle class will see.

Overall, this bill is absolutely awful. It's also deeply unpopular with the American people. The GOP will face stunning losses in 2018 thanks to this.

Bloomberg is absolutely correct. He's one of my favorite billionaires.

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Dec 21, 2017

Just in, old man yells at clouds.

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Dec 21, 2017

Someone should remind Bloomberg that regardless of his plans for additional cash windfalls, he WILL invest it unless he puts the money under a mattress. Money that goes into a bank account and does nothing actually gets lent out; money that is used to buy back stock goes to shareholders who pay capital gains taxes and then reinvest the money elsewhere; money used to pay additional dividends gets taxed and then reinvested; OR money goes to actual capital investment.

So unless Bloomberg plans to keep his money in his literal mattress, the money will be used in the economy.

Dec 21, 2017

This is true, but its missing an important point: all money that's in circulation is allocated in some fashion, but not all allocations enhance productivity equally. If you are going to borrow more than a trillion dollars of debt, you should be sure that's its deployed in investments that increase productivity enough to service said debt. These tax breaks are extremely short-term orientated, do little to encourage capex, and rely on accelerating growth during what is already approaching the longest economic expansion in history. Stock buybacks and dividends do not enhance productivity; they enrich a concentrated subset of shareholders. Just because that money is not siphoned out of the economy doesn't mean it's inducing meaningful economic and productivity enhancing growth.

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Dec 21, 2017
Schreckstoff:

This is true, but its missing an important point: all money that's in circulation is allocated in some fashion, but not all allocations enhance productivity equally. If you are going to borrow more than a trillion dollars of debt,

See my post below. This assumes we borrow more than $1T. The CBO's estimates are almost certainly wrong, unless you agree with them that 2018 should see only 2% GDP growth.

Schreckstoff:

These tax breaks are extremely short-term orientated,

What are you talking about? The corporate income tax rate was permanently cut.

Schreckstoff:

do little to encourage capex

What are you talking about? There are all kinds of pro-growth incentives in the bill, such as a lower tax rate and capital investment expensing.

Schreckstoff:

and rely on accelerating growth during what is already approaching the longest economic expansion in history.

Lies, damn lies, and statistics. It's been a long and slow expansion. Some of the worst GDP growth we have experienced in modern times. The purpose of corporate income tax reform is to increase baseline GDP growth closer to the historical norm.

Schreckstoff:

Stock buybacks and dividends do not enhance productivity; they enrich a concentrated subset of shareholders. Just because that money is not siphoned out of the economy doesn't mean it's inducing meaningful economic and productivity enhancing growth.

What exactly do rich people do with money? They invest it or spend it. I also reject the premise that stocks are only for the rich. About half (47%) of the nation owns stocks.

Dec 21, 2017

This is an imperfect but extremely good tax cut, on net. My thoughts:

The core purpose of this tax bill was to cut the corporate income tax rate from a preposterously high rate (relative to America's global competitors) to a competitive rate (although I support 0% corporate income tax rate). Everything else in the bill is completely unimportant to me as it was put in as political horse-trading to try to get the corporate income tax cut through the Senate via reconciliation because not a single Democrat supported cutting the corporate income tax rate to still be above Canada's.

As far as this not being "fiscally responsible," that's demonstrably wrong and can be demonstrated through simple mathematics that you can layout in Excel. Explanation:

Absolute debt is totally irrelevant; if absolute debt were relevant then Venezuela would be better off fiscally than the U.S. Relative debt is what's important. As of 2016 (or was it 2017? I can't remember now), the federal government's debt-to-GDP ratio was 106%. The core goal is to bring down the debt-to-GDP ratio. In that vein (and you can do this in Excel!), if this bill increases annual GDP growth just 1/8% above baseline annual GDP growth of 2% over the next decade then the bill's $1.5T in increased debt, on a marginal basis, does not increase the debt-to-GDP ratio (i.e. it remains about 106%). Any growth over 1/8% over baseline GDP growth improves, on a marginal basis, the debt-to-GDP ratio. For example, if growth is 1/2% above baseline GDP growth, the marginal debt-to-GDP (the additional debt caused by the tax cut to the additional GDP caused by the tax cut) would be only 26%, thus bringing the total deb-to-GDP down as it's averaged with the current 106%.

Also, the CBO is laughably bad at making economic projections. The CBO's $1.5T deficit projection is based on 2.0% GDP growth in 2018, which is absurd on its face, and out years that are well under 2.0%.

Finally, the reason the Democrats are so opposed to these tax cuts is because it will expose their bankrupt ideology for what it is. The left, in an effort to excuse slow growth during the Obama regime, argued for the laughably absurd notion of "secular stagnation" that suggests the U.S. has reached a point of diminishing marginal growth because of its sheer size. Trump slashing regulation and promised tax cuts have already caused the economy to roar back to life in 2017, and in 2018 and 2019 the economy will likely eclipse 3.0% GDP growth (possibly 4.0%), assuring Trump's likely re-election (although I hope he steps down in 2020).

Dec 22, 2017

This misses on many levels and is void of any meaningful macro context. If the U.S. economy does not experience a recession in the next decade it would be the longest expansion in U.S. history by nearly 2X.

So you have an aging economic expansion at month 102, at a time when the Fed will be selling more than 2 trillion dollars worth of bonds and contracting its balance sheet by 600 billion per year, where the yield curve is flattening, and the starting point is an all time high in earnings and all time highs in nearly every major stock exchange. And you think that Tax cuts, the majority of which expire, will lift the economy by more than 2% per year, every year with no slip, for the next decade?

This is pure folly. Again, there is no real growth incentives structured into the bill. The full-write of business investments sunsets in 2022. The only thing this incentives is an acceleration of previously planned Capex, not additional long-term Capex.

To argue that this bill is fiscally responsible or that it will not add to the deficit in even a relative way is intellectually dishonest. I'd be more than willing to wager that the debt-to-GDP ratio is above 106% by the end of Trump's 4 year term.

Dec 22, 2017
Schreckstoff:

This misses on many levels and is void of any meaningful macro context. If the U.S. economy does not experience a recession in the next decade it would be the longest expansion in U.S. history by nearly 2X.

So you have an aging economic expansion at month 102, at a time when the Fed will be selling more than 2 trillion dollars worth of bonds and contracting its balance sheet by 600 billion per year, where the yield curve is flattening, and the starting point is an all time high in earnings and all time highs in nearly every major stock exchange. And you think that Tax cuts, the majority of which expire, will lift the economy by more than 2% per year, every year with no slip, for the next decade?

This is pure folly. Again, there is no real growth incentives structured into the bill. The full-write of business investments sunsets in 2022. The only thing this incentives is an acceleration of previously planned Capex, not additional long-term Capex.

To argue that this bill is fiscally responsible or that it will not add to the deficit in even a relative way is intellectually dishonest. I'd be more than willing to wager that the debt-to-GDP ratio is above 106% by the end of Trump's 4 year term.

Ok, you don't really get it.

The idea is not that the tax cuts will create an eternal expansion; it's that they will increase GDP growth over baseline GDP growth. So, let's say there's a recession in 2021 where the economy "grows" at -0.3%; the idea is that because of lower tax rates throughout the economy the economic growth was -0.3% rather than -0.6% during the 2021 recession. Or, in another universe, 2021 is an incredible year and the economy grew at a rate of 3.5% vs a good year without the lower tax rates where growth only realized 3.2% growth. These sound like small numbers, but over the course of a decade, 0.125% of additional (marginal) growth as a result of the tax cuts actually leaves the U.S. federal debt in the same proportion as it is today, assuming the CBO's absurdly conservative (and always wrong) estimation of economic growth and dynamic growth.

Also, I don't know why you keep repeating this line that the tax cuts have no growth incentives. Dropping the corporate income tax rate from 35% to 21% is a HUGE growth incentive. But I guess if you repeat a lie over and over again it becomes the truth, right?

Dec 22, 2017
Dances with Dachshunds:

Also, I don't know why you keep repeating this line that the tax cuts have no growth incentives. Dropping the corporate income tax rate from 35% to 21% is a HUGE growth incentive. But I guess if you repeat a lie over and over again it becomes the truth, right?

I'm repeating the line because the data patently supports it. You rely on hand-waving and theorizing. It harks back to the old economist joke, "That's right in practice, but will it work in theory".

In 1986, Reagan signs the Tax Reform Act of 1986 which reduces the corporate tax rate from 46% to 34%. U.S. private investment in Q1 of 1986 is 13.6% of GDP. Following the corporate tax cuts, private investment falls and remains below the 1986 highs for 45 straight quarters. In other words the entire following decade.

This was during a period of time in which GDP was growing by 3.5% and share buybacks and shareholder activism were not the pressing phenomenon they are today.

So, spare me the theory.

Dec 22, 2017
Schreckstoff:
Dances with Dachshunds:

Also, I don't know why you keep repeating this line that the tax cuts have no growth incentives. Dropping the corporate income tax rate from 35% to 21% is a HUGE growth incentive. But I guess if you repeat a lie over and over again it becomes the truth, right?

I'm repeating the line because the data patently supports it. You rely on hand-waving and theorizing. It harks back to the old economist joke, "That's right in practice, but will it work in theory".

In 1986, Reagan signs the Tax Reform Act of 1986 which reduces the corporate tax rate from 46% to 34%. U.S. private investment in Q1 of 1986 is 13.6% of GDP. Following the corporate tax cuts, private investment falls and remains below the 1986 highs for 45 straight quarters. In other words the entire following decade.

This was during a period of time in which GDP was growing by 3.5% and share buybacks and shareholder activism were not the pressing phenomenon they are today.

So, spare me the theory.

The Tax Reform Act of 1986 did whole helluva a lot. It fundamentally changed the tax structure of the United States and was one of the most material reforms of the tax code in several generations. Calling that Act a "corporate income tax rate cut" in isolation is amazingly dishonest. Making positive or negative correlations between that corporate tax rate cut and growth is absurd considering how much changed with the 1986 Act.

Regardless, do you think the U.S. would have remained competitive with a 46% corporate income tax rate in an era (the 1990s and 2000s) when global competitors were rising from the ashes and lowering their corporate rates into the teens and 20s?

Dec 21, 2017

I have some issues with this tax plan, but overall it's solid, given the political constraints and the reality that no plan can satisfy every group. Such is the nature of policy.

The liberal and media critique has oftentimes been disingenuous and bizarre.

  1. This plan actually hits the ultra-wealthy taxpayers in high tax liberal states. Don't liberals always want the rich to pay their "fair share?"
  2. This plan doubles the standard deduction and the child tax credit. It also gives tax credits to parents who want to send their kids to private schools, thus expanding school choice options.
  3. Capping the SALT deduction is the right move. As other posters have noted, high tax liberal states have been using these deduction to get away with ridiculous government spending and ever increasing taxes. Now, taxpayers have a choice: vote for Republicans who will cut those taxes or move to a state with a lower tax burden. The liberals who run these states have to accept the consequences of their policies.
  4. Approximately 95% of taxpayers will see a cut. Not sure why liberals are opposed to this. Their argument is that the wealthy will save more, but that's true of any cut, since the rates are on a marginal basis. Let's use a simple example in which we compare 2 taxpayers: Person A makes $50K/year and person B makes $500K/year. Let's say it's a true progressive tax cut in that the cuts in the lower marginal rates are higher than the cuts to the upper marginal rates. In such a scenario, both taxpayers enjoy the same savings on income from $0-$50K. Once we go above $50K/year, person B continues paying and will benefit from any cut above that range while person A stops since he only makes $50K/year. In this scenario, the only way that both taxpayers enjoy the same savings in absolute dollars is if there is ZERO cut in marginal rates above $50K/year.
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Dec 21, 2017

This article is not a direct response to Bloomberg (I believe it predates Bloomberg's moronic article), but it touches on a lot of points.

http://www.realclearmarkets.com/articles/2017/12/1...
I've highlighted the opening paragraphs:

The World Record for the men's 100-meter dash is 9.58 seconds, while the men's world record for the for the 100-meter hurdles is 12.80 seconds. The athletes run the same distance on the same track and yet the Hurdlers consistently turn in times almost 33% slower. It's obvious that each of the ten hurdles in the Athletes path slows them down. If there were fewer hurdles, it would stand to reason that their times would improve. If the hurdles were removed completely you would expect the times to improve to the point where they were the same as the 100-meter dash. Hurdles in sports and business slow you down.

The government imposes hurdles on the economy in the form of taxes and regulations. While admitting that punitive taxes and regulations on things like cigarettes are levied with the intent of reducing consumption, they want you to believe that other taxes and regulations have little or no effect on economic growth. Those who suggest that these hurdles have little impact and that removing them won't make much difference are the same people who told us last year that the anemic, 1.6% economic growth rate was the new normal.

They told us we should expect to see more of the same slow economic growth moving forward. They reminded us that the economic recovery was getting old and it wouldn't be long before economic growth would decelerate. What happened to their predictions? Far from decelerating the economy has been accelerating all year long with annual economic growth heading towards the 3+% range. Their nearly 1.5% miss on economic growth is no small miss. A 19 trillion dollar economy growing at 3.5% is 3.6 trillion dollars larger at the end of ten years than an economy that grows at 2%. Our tax code which has proven that it routinely provides 18% of GDP in the form of tax revenue, regardless of the rate structure, would produce an additional 660 billion dollars in tax revenue per year because of the increased growth.

Dec 21, 2017
Dances with Dachshunds:

This article is not a direct response to Bloomberg (I believe it predates Bloomberg's moronic article), but it touches on a lot of points.

http://www.realclearmarkets.com/articles/2017/12/1...
I've highlighted the opening paragraphs:

The World Record for the men's 100-meter dash is 9.58 seconds, while the men's world record for the for the 100-meter hurdles is 12.80 seconds. The athletes run the same distance on the same track and yet the Hurdlers consistently turn in times almost 33% slower. It's obvious that each of the ten hurdles in the Athletes path slows them down. If there were fewer hurdles, it would stand to reason that their times would improve. If the hurdles were removed completely you would expect the times to improve to the point where they were the same as the 100-meter dash. Hurdles in sports and business slow you down.

The government imposes hurdles on the economy in the form of taxes and regulations. While admitting that punitive taxes and regulations on things like cigarettes are levied with the intent of reducing consumption, they want you to believe that other taxes and regulations have little or no effect on economic growth. Those who suggest that these hurdles have little impact and that removing them won't make much difference are the same people who told us last year that the anemic, 1.6% economic growth rate was the new normal.

They told us we should expect to see more of the same slow economic growth moving forward. They reminded us that the economic recovery was getting old and it wouldn't be long before economic growth would decelerate. What happened to their predictions? Far from decelerating the economy has been accelerating all year long with annual economic growth heading towards the 3+% range. Their nearly 1.5% miss on economic growth is no small miss. A 19 trillion dollar economy growing at 3.5% is 3.6 trillion dollars larger at the end of ten years than an economy that grows at 2%. Our tax code which has proven that it routinely provides 18% of GDP in the form of tax revenue, regardless of the rate structure, would produce an additional 660 billion dollars in tax revenue per year because of the increased growth.

Let's not forget that the national debt doubled under Barry Hussein Obama and that Obama is the only President in the past 100 years who did not preside over a single year of 2%+ real GDP growth.

Dec 21, 2017

Dems have become fiscal hawks all of a sudden. Of course, as I've pointed out, they are mathematically wrong in their fiscal critiques.

Dec 21, 2017

He inherited a war and one of the worst market crashes in history and a subsequent recession. He turned that into a long period of growth and lowering of unemployment...

And BTW bush had way your wrong about Obama's statistics but its a given considering you got your facta from faux news.

Dec 21, 2017
duey_dun_did_it_again:

He inherited a war and one of the worst market crashes in history and a subsequent recession. He turned that into a long period of growth and lowering of unemployment...

Obama literally did nothing positive for the economy. He added taxes and regulation. What should have been a huge post-recession growth spurt turned into one of the worst post-recession economic growth spurts on record, this despite record levels of quantitative easing from the Federal Reserve.

Dec 21, 2017

Please explain why "it should have been a huge post recession growth period" .

So one of your republican idiots messes up the economy and starts a war, then a democrat fixes their mess but struggles because its so bad. Then your guys says yeah he fixed the problem that we made but he didn't do ur fast enough so he did nothing. Bush tax cuts and trickle down economics failed miserably.

Dec 21, 2017
duey_dun_did_it_again:

Please explain why "it should have been a huge post recession growth period" .

Because high growth post recession periods almost always happen, except under Obama.

duey_dun_did_it_again:

So one of your republican idiots messes up the economy

What, specifically, did Bush/Republicans do to mess up the economy? Be specific.

duey_dun_did_it_again:

then a democrat fixes their mess

And what, specifically, did Obama do to "fix" "their" mess? Be specific.

duey_dun_did_it_again:

Bush tax cuts and trickle down economics failed miserably.

Not sure what your definition of "trickle-down-economics" is, but what you're saying is demonstrably wrong. Look at the post-Kennedy, post-Reagan, and post-GW Bush tax cut periods and you'll see heightened economic growth in each case.

Dec 22, 2017
Dances with Dachshunds:
duey_dun_did_it_again:

Please explain why "it should have been a huge post recession growth period" .

Because high growth post recession periods almost always happen, except under Obama.

duey_dun_did_it_again:

So one of your republican idiots messes up the economy

What, specifically, did Bush/Republicans do to mess up the economy? Be specific.

duey_dun_did_it_again:

then a democrat fixes their mess

And what, specifically, did Obama do to "fix" "their" mess? Be specific.

duey_dun_did_it_again:

Bush tax cuts and trickle down economics failed miserably.

Not sure what your definition of "trickle-down-economics" is, but what you're saying is demonstrably wrong. Look at the post-Kennedy, post-Reagan, and post-GW Bush tax cut periods and you'll see heightened economic growth in each case.

You've apparently never read about the recession in '82 but living in reality would be damaging to your devotion to the Republican Party. This may trigger you but Reagan's tax cuts were so disasterous they had to be scaled back when the federal deficit ballooned and the economy tanked again. And by the end of Reagan's presidency the debt had tripled but of course you would never apply any standards whatsoever to Republican politicians let alone Reagan aka Jesus.

    • 3
    • 1
Dec 22, 2017
thurnis haley:
Dances with Dachshunds:
duey_dun_did_it_again:

Please explain why "it should have been a huge post recession growth period" .

Because high growth post recession periods almost always happen, except under Obama.

duey_dun_did_it_again:

So one of your republican idiots messes up the economy

What, specifically, did Bush/Republicans do to mess up the economy? Be specific.

duey_dun_did_it_again:

then a democrat fixes their mess

And what, specifically, did Obama do to "fix" "their" mess? Be specific.

duey_dun_did_it_again:

Bush tax cuts and trickle down economics failed miserably.

Not sure what your definition of "trickle-down-economics" is, but what you're saying is demonstrably wrong. Look at the post-Kennedy, post-Reagan, and post-GW Bush tax cut periods and you'll see heightened economic growth in each case.

You've apparently never read about the recession in '82 but living in reality would be damaging to your devotion to the Republican Party. This may trigger you but Reagan's tax cuts were so disasterous they had to be scaled back when the federal deficit ballooned and the economy tanked again. And by the end of Reagan's presidency the debt had tripled but of course you would never apply any standards whatsoever to Republican politicians let alone Reagan aka Jesus.

Of course you know the recession of the early 1980's 1) started under Carter and 2) had to do with the Federal Reserve raising interest rates sharply to combat the huge levels of inflation of the 1970's. But don't let facts get in the way of your ideology.

Real GDP growth:

1980, when the recession started (Jimmy Carter was President): -0.2%

Reagan Presidency
1981: 2.6%
1982: -1.9%
1983: 4.6%
1984: 7.3%
Ronald Reagan wins re-election in historic landslide (states: 49-1).
1985: 4.2%
1986: 3.5%
1987: 3.5%
1988: 4.2%
Ronald Reagan's VP, HW Bush, wins election

Real GDP growth: 3.47% per year (despite the early 1980's recession as the Federal Reserve brutally raised rates to control inflation). Post recession real GDP growth per year: 4.54%

For historical reference, inflation:

1979: 9.28%
1980: 13.91%
1981: 11.83%
1982: 8.39%

See how the inflation curve shifted? Yeah, that's called much higher interest rates. In other words, "Reaganomics" was fighting the headwinds of quantitative tightening while Barack Obama had laughably stale growth despite receiving record levels of quantitative easing from the Federal Reserve.

Dec 22, 2017
Dances with Dachshunds:
thurnis haley:
Dances with Dachshunds:
duey_dun_did_it_again:

Please explain why "it should have been a huge post recession growth period" .

Because high growth post recession periods almost always happen, except under Obama.

duey_dun_did_it_again:

So one of your republican idiots messes up the economy

What, specifically, did Bush/Republicans do to mess up the economy? Be specific.

duey_dun_did_it_again:

then a democrat fixes their mess

And what, specifically, did Obama do to "fix" "their" mess? Be specific.

duey_dun_did_it_again:

Bush tax cuts and trickle down economics failed miserably.

Not sure what your definition of "trickle-down-economics" is, but what you're saying is demonstrably wrong. Look at the post-Kennedy, post-Reagan, and post-GW Bush tax cut periods and you'll see heightened economic growth in each case.

You've apparently never read about the recession in '82 but living in reality would be damaging to your devotion to the Republican Party. This may trigger you but Reagan's tax cuts were so disasterous they had to be scaled back when the federal deficit ballooned and the economy tanked again. And by the end of Reagan's presidency the debt had tripled but of course you would never apply any standards whatsoever to Republican politicians let alone Reagan aka Jesus.

Of course you know the recession of the early 1980's 1) started under Carter and 2) had to do with the Federal Reserve raising interest rates sharply to combat the huge levels of inflation of the 1970's. But don't let facts get in the way of your ideology.

Real GDP growth:

1980, when the recession started (Jimmy Carter was President): -0.2%

Reagan Presidency
1981: 2.6%
1982: -1.9%
1983: 4.6%
1984: 7.3%
Ronald Reagan wins re-election in historic landslide (states: 49-1).
1985: 4.2%
1986: 3.5%
1987: 3.5%
1988: 4.2%
Ronald Reagan's VP, HW Bush, wins election

Real GDP growth: 3.47% per year (despite the early 1980's recession as the Federal Reserve brutally raised rates to control inflation). Post recession real GDP growth per year: 4.54%

For historical reference, inflation:

1979: 9.28%
1980: 13.91%
1981: 11.83%
1982: 8.39%

See how the inflation curve shifted? Yeah, that's called much higher interest rates. In other words, "Reaganomics" was fighting the headwinds of quantitative tightening while Barack Obama had laughably stale growth despite receiving record levels of quantitative easing from the Federal Reserve.

Excellent post. Some more historical context for the historically ignorant liberals who worship Barry Hussein Obama as their messiah. America was in REALLY bad shape in 1980 when Reagan was elected. Consider the following: double digit inflation and double digit unemployment (stagflation), long gas lines, high crime, very high tax rates (top marginal rate was 70%!), excessive regulations that crippled the capital markets and productivity, American prestige and influence were at their nadir with many Americans assigned to the "reality" that the Soviet Union was the dominant power, general disillusionment with the government in the wake of Vietnam and Watergate.

Fast forward to 1988, the last year of Reagan's presidency, and America was a totally different country and for the better. After FDR, Reagan was the most consequential President of the 20th century.

When people excuse Obama's poor economic performance by pointing out the 2008 financial crisis, it is entire ahistorical because it ignores previous Presidents who also inherited terrible economies but did a much better job of turning things around. Yes, I am aware that Presidents don't have that much power over the economy, but policies do matter. The recovery would have been far more robust if we had a better President at the helm.

    • 2
Dec 22, 2017

Have you checked the markets lately?
Please tell me why the economy needs to be stimulated?

Dec 22, 2017
duey_dun_did_it_again:

Have you checked the markets lately?
Please tell me why the economy needs to be stimulated?

Consumer confidence, capital formation and GDP ramped up in 2017. It's impossible to say for sure why, but many people speculate that it's the market responding to anticipated tax reform/cuts. So, it's at least possible that the very possibility of tax reform boosted the economy.

Dec 22, 2017
Rufus1234:

When people excuse Obama's poor economic performance by pointing out the 2008 financial crisis, it is entire ahistorical because it ignores previous Presidents who also inherited terrible economies but did a much better job of turning things around.

This is key. Obama's lackeys spent his entire administration apologizing for (in the Greek "apologetics" sense--defending) slow growth under Obama. They even credit Obama for "saving" the country when TARP was passed and signed under Bush...

Dec 22, 2017
thurnis haley:
Dances with Dachshunds:
duey_dun_did_it_again:

Please explain why "it should have been a huge post recession growth period" .

Because high growth post recession periods almost always happen, except under Obama.

duey_dun_did_it_again:

So one of your republican idiots messes up the economy

What, specifically, did Bush/Republicans do to mess up the economy? Be specific.

duey_dun_did_it_again:

then a democrat fixes their mess

And what, specifically, did Obama do to "fix" "their" mess? Be specific.

duey_dun_did_it_again:

Bush tax cuts and trickle down economics failed miserably.

Not sure what your definition of "trickle-down-economics" is, but what you're saying is demonstrably wrong. Look at the post-Kennedy, post-Reagan, and post-GW Bush tax cut periods and you'll see heightened economic growth in each case.

You've apparently never read about the recession in '82 but living in reality would be damaging to your devotion to the Republican Party. This may trigger you but Reagan's tax cuts were so disasterous they had to be scaled back when the federal deficit ballooned and the economy tanked again. And by the end of Reagan's presidency the debt had tripled but of course you would never apply any standards whatsoever to Republican politicians let alone Reagan aka Jesus.

The 1982 recession was the result of Volcker raising rates to kill inflation. Reagan was well aware of this but tacitly supported Volcker's tough course of action and never explicitly called him out. Yes, the Fed acts independent of the President, but if Reagan had publicly excoriated Volcker, things would have played out differently.

Carter did appoint Volcker in 1979 but only because he couldn't find a private sector businessman to take the job. To improve his re-election chances in 1980, Carter replaced 5 of his cabinet secretaries, including Treasury. Because the private sector turned him down, Carter appointed the Fed chairman, William Miller, as the Treasury Secretary. Volcker was thus Miller's replacement.

The numbers don't lie about the economic growth during the Reagan 80's. Yes, the debt increased from $997 billion to $2.85 trillion during the Reagan presidency, but that was due to both the tax cuts and the ramp up in defense spending in order to cripple the Soviet Union. In my opinion, the accomplishments were worth the increase in the debt. When you look at the federal deficit as % of GDP, it peaked at 5.9% in 1983 and fell to 2.7% in 1989.

Dec 22, 2017

To Michael Bloomberg, Warren Buffet, and others who "Don't Need The Money" kindly contribute X% of your annual income to this very noble and charitable cause: Gift Contributions to Reduce Debt Held by the Public

Thank you for your generous contributions...the American people salute you!

    • 1
Dec 23, 2017
RedRage:

To Michael Bloomberg, Warren Buffet, and others who "Don't Need The Money" kindly contribute X% of your annual income to this very noble and charitable cause: Gift Contributions to Reduce Debt Held by the Public

Thank you for your generous contributions...the American people salute you!

Ha! I love it. It's actually incredible how little money is given each year given the virtue signaling coming from that despicable hypocrite Warren Buffett. He goes on TV saying he wants his taxes increased, all the while ignoring the fact that there is a mechanism to literally allow him to write a check of his own making right to the federal treasury.

Dec 22, 2017
Dec 22, 2017