Monday, November 14, 2016

Trumpian economic policies

Lonnie Shekhtman describes some of what we need to be looking for in Trump's economic policies in The American economy under a President Trump: a primer Christian Science Monitor 11/10/2016:

... a Trump presidency likely means less regulation of some industries, such as finance and pharmaceuticals, plus corporate and individual income tax cuts. ...

And some economists predict that Trump’s tax cuts will only help the wealthy.

“Historically Republicans get elected promising tax cuts and they deliver,” says Aaron Klein, an economist at the Brookings Institution, a public policy think tank. But, adds Mr. Klein, “those tax cuts have traditionally benefited the holders of capital which exacerbates income inequality.” ...

Tax cuts are tried and true Republican territory, but Trump has also put forward one proposal that is more commonly spotted across the aisle: a massive investment in America’s infrastructure. The president-elect has vowed to spend $1 trillion to rehab America’s roads, tunnels, ports, and bridges in a national project that he says could create millions of jobs.
I don't expect the Republicans to enact anything like that expansive an infrastructure program. And that what they do enact will be heavily weighted toward Republican cronies. Watch for the Trump family business to wind up getting a not-inconsiderable share.

This is an Al Jazeera English report on the topic of what we might expect on economic policies, 'Trumponomics': Putting America first - Counting the Cost 11/12/2016

And Paul Ryan, loyal servants of financial vultures everywhere, is pushing for an immediate phase-out of Medicare, which will have major economic effects, not to mention making life worse for just about everybody:

With all the other things we've discussed so far today, I wanted to return to one critical one. It's not about mights or maybes or fears of what's to come. It's about what's coming just after President-Elect Trump's inauguration. Paul Ryan has been pushing to phase out Medicare and replace it with private insurance for several years. But now it's real with unified Republican government. He just said he will try to rush it through early next year while repealing Obamacare.
Robert Reich on his Facebook page predicts this, but the way he criticizes it scares me:

The deficit will soar, the debt will explode. Trump’s plans for infrastructure and military spending along with a tax cut (mostly for the wealthy) will cause endless red ink. You might think that Paul Ryan and other Republican deficit hawks would object. Think again. Reagan and George W. Bush created giant deficits, too. Republicans talk as if they’re deficit hawks but when in office they create giant deficits, so that Democrats – when they gain power again – have no choice but to cut them, and can't get much of anything new done. I've been there, done that. [my emphasis]
Republicans haven't cared about the deficit for the last 35 years, at least. That includes Republican voters. Also swing voters. Also most Democratic voters. It would be interesting to see a poll testing how many voters can correctly distinguish between debt and deficit.

For the Republicans, the deficit is just a tribal slogan for them that means, "Stop giving money to Those People!"

And if the Democrats use the green-eye-shades argument against Trump's tax cuts that they will increase the deficit, it will fall on deaf ears most places, though some of the donor class will like it. For exactly the reason Reich disappointingly takes as valid, "Republicans talk as if they’re deficit hawks but when in office they create giant deficits, so that Democrats – when they gain power again – have no choice but to cut them, and can't get much of anything new done."

But that's a political death wish for the Democrats to take that approach. First, because it isn't sound economically. The US borrows money in its own currency, which is also the reserve currency for the world. There is no default risk as long as we're borrowing in our own currency. Japan's debt has been running for years at about 200% of GDP, more than twice the proportion of the US. And second, it means they will be using an argument nobody cares about - the deficit - instead of pointing at the real and immediate problem with cutting taxes for the One Percent: rising inequality and encouragement of reckless behavior by CEOs.

It's more critical than ever that the Democrats start creating a sharp profile for the whole Party to distinguish them from the Reps' devotion to the One Percent. Taking the word "budget deficit" out of their political vocabulary would be a good place to start.

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