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Thread: The US Recovery

  1. #901
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by astralis View Post
    what, you're not convinced by the balanced budget amendment they're proposing?

    i wrote a long time ago here that the Tea Party folks were never interested in fiscal rectitude other than as an anti-Obama talking point. when it comes to a choice between massive tax cuts and deficit reduction, we know what wins every time.
    Who am I to argue with the CBO, a GOPer?


    The Obama Record

    Comparing final data for 2010-17 to budget plans released in March 2009 gives us insight into expectations vs. reality.
    As usual, reality won.

    Individual tax revenues fell short by $2.8 trillion over the course of the Obama Administration’s eight year run.* Payroll tax receipts fell $844 billion short, and corporate taxes by $351 billion. Overall, the government underestimated its own income by $3,672 billion.

    On the other side of the balance sheet, mandatory spending was $2,254 billion higher than originally projected. Discretionary spending fell by $229 billion, which was probably not the smartest strategy when the economy is deflating for the first time since the 1950s. Since the Fed had to do all the heavy lifting (once the original emergency spending was dealt with, congress went on strike), interest rates collapsed, and with them, interest payments (by $892 billion).

    Overall, the debt held by the public rose $3.3 trillion as the economy underperformed by $258 billion, a remarkably accurate long-term forecast.

    https://www.cbo.gov/about/products/b...conomic-data#3


    * Remember, coming into office in January 2009 means you don't get the credit or the blame for what happens until 2010.
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  2. #902
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    the reality has ALWAYS been that so-called Obama spending was largely driven by pre-Obama mandated spending due to the Great Recession.

    Trump and the GOP do not have that excuse. they're legislatively driving massive cuts to revenue. as far as i'm concerned, the next time some deficit fear-monger raises his head and talks about GREECE, the only response should be "stfu".
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  3. #903
    Senior Contributor DOR's Avatar
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    Revenue will rise by 4.8% per annum in 2018-23, down from 6.2% p.a. in the previous (2013-17) five-year period. That’s despite a bump up in nominal economic growth (the base on which taxes are applied) from 3.5% p.a. to 4.1% a year.

    Spending will rise 5.8% a year, after five years of average 2.4% p.a.. And, after dropping 9.3% each year, the deficit will rise by 9.6% in 2018 and in each of the four subsequent years.
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  4. #904
    Senior Contributor DOR's Avatar
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    US Minimum Wage, real and nominal

    Came across a deflator and decided to see what it might tell me.

    The time duration between nominal increases was 9 years in 1981-89, then three adjustments in three years. There was then a four year wait (1992-95), followed by three adjustments in three years. The next pause was for another nine years (1998-06), followed by four adjustments in four years.

    We are now in the ninth year at $7.25/hr.

    ADD:
    If we were to start adjusting in the 10th year, and at the same pace as previously, we’d be looking at $9.25 an hour in 2020, which would bring us back to the same real rate as there was in 1982-83.
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    Last edited by DOR; 18 Jun 18, at 11:36.
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  5. #905
    Senior Contributor GVChamp's Avatar
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    Quote Originally Posted by astralis View Post
    the reality has ALWAYS been that so-called Obama spending was largely driven by pre-Obama mandated spending due to the Great Recession.

    Trump and the GOP do not have that excuse. they're legislatively driving massive cuts to revenue. as far as i'm concerned, the next time some deficit fear-monger raises his head and talks about GREECE, the only response should be "stfu".
    The Tea Party and Fox News are obviously pretty bad, but there's a lot more nuanced critique out there that's not "rah-rah Trump tax cuts are awesome" and "Obama is going to turn us into Greece." I don't think anyone of said people liked the Trump tax cuts, but they think the tax simplification was way, WAY better than anything they could've hoped for.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  6. #906
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    Quote Originally Posted by GVChamp View Post
    The Tea Party and Fox News are obviously pretty bad, but there's a lot more nuanced critique out there that's not "rah-rah Trump tax cuts are awesome" and "Obama is going to turn us into Greece." I don't think anyone of said people liked the Trump tax cuts, but they think the tax simplification was way, WAY better than anything they could've hoped for.
    Unless you're an American living abroad, and have built and run a small business for decades. In that case, the new tax bite means that anything you earned since the year dot is suddenly taxable, and all of it is due.

    Sure, it's an unintended consequence.
    No, it wasn't a Democratically led Congress that drafted such a law.
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  7. #907
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    What we knew back then

    Brad DeLong has been running his own economics blog posts -- and other analysis and opinions -- that were posted ten years ago (http://delong.typepad.com/). That prompted me to think about the delays in getting accurate economic data, and the inevitable question, "What did you know, and when did you know it?"

    In one chart, unemployment had doubled and was still rising; inflation had vanished, and deflation emerged; we were losing 4% of total employment year-on-year; and financial institutions' borrowings from the Fed had gone from an 88-year average of $500 million a month to $700 billion, and were only just beginning to ease.

    In one chart:
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  8. #908
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    lol, after years of warning against hyperinflation from Obama and the Fed, now Professional Bootlicker Stephen Moore starts saying WHAT, ME WORRY?

    http://thehill.com/opinion/finance/3...ing-prosperity

    Trump rightly calls out Federal Reserve for fearing prosperity
    BY STEPHEN MOORE AND LOUIS WOODHILL, OPINION CONTRIBUTORS — 07/26/18 10:00 AM EDT 134 THE VIEWS EXPRESSED BY CONTRIBUTORS ARE THEIR OWN AND NOT THE VIEW OF THE HILL

    Trump rightly calls out Federal Reserve for fearing prosperity

    Lord, will we ever be free of the idiotic “Phillips Curve” notion that prosperity causes inflation? That’s basically what Donald Trump was fuming about when he stated that he was "not happy" with the Federal Reserve’s interest rate hikes.

    The entire economic establishment hyperventilated over this supposed violation of “Fed independence.” But the public considers the president to be our economic CEO, and everyone now calls this “Trump’s economy.” So why shouldn’t he call out Fed chairman Jay Powell when he thinks the central bank is wrong?

    In this particular case, Trump may be right and Powell wrong. The Fed keeps saying that the economy is "strong enough" to endure higher interest rates. Maybe so, but the fact that you are strong enough to survive hitting yourself in the head with a hammer is not a reason to do it.

    Yes, the economy is surging, thanks to the Trump tax, regulatory and other pro-business reforms. We should get 4.5 percent economic growth in 2018’s second quarter, which will be officially reported on Friday. We have the lowest unemployment rates and the fewest claims for unemployment insurance benefits since Neil Armstrong walked on the Moon. Does that mean that the American economy is "overheating?" No, because “overheating” is a false notion that somehow there is a limit to growth. Trump’s point is that there is no such thing as too much real growth, and he’s right.

    History is on Trump’s side. After the JFK tax cuts we routinely saw 6 percent growth in the 1960s, with a stable dollar and low inflation. In the 1980s, Reagan delivered quarters with 8 percent growth, even as inflation fell. As economist Arthur Laffer puts it, “when the economy produces more apples, the price of apples falls, it doesn’t rise.”

    Unfortunately, the Fed has become the last bastion of the long-since-discredited Phillips Curve theory, that low unemployment causes inflation. Too often, the Fed believes that its mission is to suppress rapid economic growth, wage gains, and capital investment before ordinary Americans can feel the benefits. In other words, the Fed regards prosperity as a disease to be attacked, not a condition to be nurtured.

    The Fed’s only job should be to keep the dollar stable. If the dollar is stable, consumer price index inflation will remain moderate, just as it did in the 1960s, no matter how fast the economy grows. Yes, wages are rising, finally! Wages need to rise to make up for years of flat wages under Presidents Bush and Obama. Yes, oil price have risen, but other commodity prices are flat or falling. Just look at beef, wheat, copper and gold.

    The most widely followed index of commodity prices is 34 percent lower than it was four years ago. General commodity prices are a better indicator of the real value of the dollar than the CPI, which is plagued by definitional and measurement errors. And, while the CPI has risen by a moderate 2.3 percent over the past year, it is still far below the target established by the Fed in January 2012.

    Trump’s policies have produced the best of all economic worlds — surging growth and employment, with little inflation and a rising dollar. The sports truism applies here: Never, ever change a winning strategy. Unfortunately, the Fed seems to want to do just that, to intentionally slow growth and hold back wage gains. Trump is right to defend the prosperous American economy, which his policies created.

    No one elected Jerome Powell. Washington and academia seem to treat the Fed as an Oracle of truth with a pope-like infallibility. But the Fed has been tragically wrong — the 1970s and the early 2000s come to mind — more often than it has gotten things right. If the president doesn’t have the right to criticize misguided Fed policy, who does?
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  9. #909
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    What in the flying fuck? What a fucking dumbass. I can't believe people take that guy seriously. Commodity prices over the CPI, really?

    The Fed is subject to Congressional oversight, but it needs to have substantial independence to accomplish its policy objectives. It's very important to NOT beat central banks over the head so they DON'T create inflation. You don't start hitting the Fed unless they start serioulsy screwing up.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  10. #910
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    There's no doubt that the preliminary Q-2 numbers look good, but then the numbers have been looking good for about three years, so no real change there. Perhaps most damning of all, from Q-1 2017 – the base quarter in which the new term started – to Q-2 2018, GDP rose quarter-by-quarter by just 0.7 on average. Compare that to Obama's first five quarters, at 0.5%, with the context of what the world looked like in 2009/10.

    Forget the Quarter-on-Quarter annualized 4.1% figure; too many small adjustments to Q-1 numbers mean that figure will be revised heavily in the next few months. Focus instead on year-on-year, and the full first half outcome.

    _
    Real Growth, YoY
    _ _ _ _ _ _ _ _ _GDP _ _ PCE _ _ _ CAP _ _ _EXP _ _ _ _ IMP _ _ _ GVT _(Fed)
    Q-1 '18 _ _ _ _ 2.6% _ _ 2.4% _ _ 6.1% _ _ 4.3% _ _ _ 4.9% _ _1.9% _ 1.9
    Q-2 '18 _ _ _ _ 2.8 _ _ _ 2.7 _ _ _ _4.6 _ _ _ 5.7 _ _ _ _ 4.4 _ _ _2.2 _ _ 2.2

    1st Half '17 _ _ 2.0 _ _ _ 2.5 _ _ _ _ 3.7 _ _ _ 2.7 _ _ _ _ 4.4 _ _ _0.0 _ _ 0.6
    1st Half '18 _ _ 2.7 _ _ _ 2.5 _ _ _ _ 5.4 _ _ _ 5.0 _ _ _ _ 4.7 _ _ _ 1.0 _ _ 2.1

    Flat 2.5% (respectable, not historic) growth in consumption.
    Good bump on CAP, and Exports, but the big blow-out is Government, particularly Federal Government.

    So, what we have is a deficit-funded fiscal stimulus package at a time of strong growth and low unemployment being boosted by fear of a collapse in global trade (buy early, it may be more expensive later).
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  11. #911
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    yes, a deficit-widening President talking about the Fed is undermining him, while his political allies (whom were convinced we were headed to hyperinflation before) cheer him on by disclaiming any issue with inflation now.

    it's as if they took the caricature of Obama they drew- complete with apologizing for America abroad-- and made that guy President.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  12. #912
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    70 years worth of data revised

    As happens from time to time, the Bureau of Economic Analysis reformatted real growth data to 2012 chained dollars (it had been based on 2009 numbers). And, it also revised every quarter worth of data, real and nominal, going back to the beginning of 1947. Here's what came out:

    Over the past 70 years, the economy increased by an extra $95.1 billion (nominal), as compared to what we thought had occurred just a few days ago. Domestic demand, which is GDP but with exports added in (signifying demand for more than the economy can produce) and imports subtracted (we couldn’t eat all that was on our plate, so we gave it to the dog), was $84.1 billion larger. GDP per person rose by $291.

    Private consumption was lower, by $74 billion, mainly due to a recalculation in how prices of durable goods changed. Capital investment was higher, by $155.2 billion, thanks to greater spending on non-residential structures (up $138.3 billion). Government spending was $20.8 billion more than previous thought, with the bulk ($16.1 billion) coming from state and local governments.

    Trade, which is easier to calculate, moved by less than $7 billion on a net basis (the goods and services deficit was that much larger). As might be expected, the harder-to-calculate services trade rose by $17.2 billion on the export side, and $16.2 billion on imports.

    In real terms, the economy grew five hundredths of one percent slower over 70 years, but one-quarter of one percent slower from the first quarter of 2017 to the first quarter of 2018.

    Also released was the preliminary Q-2 data, noted above. The growth rate, +2.85% (year-on-year), was the highest in three years, largely due to the revisions to 2017 data. Without that, the growth would have been the highest since . . . Q-1. On a quarterly basis (remember: much of the revisions have been due to poor seasonality analysis), the economy grew by 4.1%, the fastest in 15 quarters. Domestic demand, revisions and all, grew half a point more slowly year-on-year than in Q-1 (+2.5%).
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  13. #913
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    All well and good but so what! Compare for me the minimum to 1950 after adjusting it for inflation. Bet it hasn't increased more than a few pennies if that. Tell me what a typical American worker makes today and compare it to 40 years ago adjusted for inflation. Bet it hasn't increased. Standard of living stagnant over those 40 years.

    How does any of this benefit the average American worker who has lost unions, who has been prevented from now filing class action suits when contracts call for mandatory arbitration.

    How does this reconcile with the repeal of corporate regulations that tried to keep the playing field from tilting all the way to corporations. Especially now since corporations are intent on forming oligopolies with total control over pricing?

    Frankly I think those numbers mean very little to almost all Americans outside a CEO or large shareholders.

    Yeah we have jobs but too bad there are no good jobs in the country for the average American. This is the kind of stuff made to order for Trump to leverage American against American.

    I think US recovery is in the end a little misleading.
    Last edited by tbm3fan; 01 Aug 18, at 06:25.

  14. #914
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    Quote Originally Posted by tbm3fan View Post
    All well and good but so what! Compare for me the minimum to 1950 after adjusting it for inflation. Bet it hasn't increased more than a few pennies if that. Tell me what a typical American worker makes today and compare it to 40 years ago adjusted for inflation. Bet it hasn't increased. Standard of living stagnant over those 40 years.

    How does any of this benefit the average American worker who has lost unions, who has been prevented from now filing class action suits when contracts call for mandatory arbitration.

    How does this reconcile with the repeal of corporate regulations that tried to keep the playing field from tilting all the way to corporations. Especially now since corporations are intent on forming oligopolies with total control over pricing?

    Frankly I think those numbers mean very little to almost all Americans outside a CEO or large shareholders.

    Yeah we have jobs but too bad there are no good jobs in the country for the average American. This is the kind of stuff made to order for Trump to leverage American against American.

    I think US recovery is in the end a little misleading.
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  15. #915
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    Quote Originally Posted by DOR View Post
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    Right, so it is stagnating and has been for a very long time before your point in time. In short the standard of living has also stagnated for about as long.

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