Was it really Obama who started this economic boom?

[ZiprHead]

Lumpen, if the dates were removed, you would not be able to tell where Bonespurs took over.

 

[SimpleDon]

Is Obama right to claim credit for Trump's booming economy?

No, Trump has to be given 90% of the credit, because he's the one who is increasing the federal deficits, whereas under Obama the deficit came down from $1.5 trillion to under 500 billion.

This increased deficit is an de facto economic stimulus which surely would create some economic boom.

This "stimulus" is at least $800 billion since Trump took over. That's easily more than enough to produce Trump's recent good economic numbers. If that much is pumped into the economy, it is sure to create an extra boom in the economy.

The national debt will soon reach 22 trillion (now $21,700,000,000,000 http://www.usdebtclock.org/ ). Going up about 1 trillion per year under Trump.

Though it went up fast under Obama, that was mainly in his first 2 or 3 years and can be blamed mostly on the crash of '08. This current surge of national debt cannot be blamed on anything like that but is a voluntary choice by Trump and the Republicans, who could realistically have kept the deficit down.

So Trump and the Republicans have to be given most of the credit for the current economic surge.

Remember -- if we want more "growth" and "job creation" to make America great again, we have to follow the innovative Trump formula of increasing the national debt another trillion bucks every year. And to keep it going, that will have to increase to 1.5 or 2 trillion per year -- whatever it takes to keep America great and impose greater and greater debt onto the future.

It matters where we inject the money that is created by the budget deficit. Trump and the Republicans have increased the deficit by lowering corporate taxes. This is the least bang for the buck possible since very little of that money is spent in the economy that you and I have anything to do with. The corporations were already rolling in money due to the widespread suppression of wages due to the neoliberalism that you champion. Suppressing wages increases profits. Corporate profits are four times greater as a percentage of GDP today as they were in the 1980's when neoliberalism really took hold of the economy.

Even if the corporations do pay higher dividends because of the tax cut it wouldn't make much difference because corporate profits go primarily to the already rich and they have a greater propensity to save their money rather than to spend it. Saving the money takes it out of the economy, whether they put it into a savings account, a bond or into the stock market.

If he had run up the deficit by passing a middle-class tax cut, most of the money created by the deficit spending would have all been spent into the economy and there would be a much greater impact on the economy for the amount of money created by the deficit.

Obama's budget deficit was due to the shortfall in tax revenues due to the Great Recession. That is an automatic breaker mechanism for recessions, it creates new money in the economy that usually is spent to help the economy recover. Unfortunately, in a recession caused by the financial sector, it takes much longer for the mechanism to work because people are more likely to pay down debt rather than to spend the money.

A word of caution, what I have explained to you is how things work in the real economy that actually exists. Many people here prefer to tell us how the fairy tale economy of the self-regulating free market would behave. If this was the economy that we have.

 

[Harry Bosch]

Is Obama right to claim credit for Trump's booming economy?

No, Trump has to be given 90% of the credit, because he's the one who is increasing the federal deficits, whereas under Obama the deficit came down from $1.5 trillion to under 500 billion.

This increased deficit is a de facto economic stimulus which surely would create some economic boom.

This "stimulus" is at least $800 billion, since Trump took over. That's easily more than enough to produce Trump's recent good economic numbers. If that much is pumped into the economy, it is sure to create extra boom in the economy.

The national debt will soon reach 22 trillion (now $21,700,000,000,000 http://www.usdebtclock.org/ ). Going up about 1 trillion per year under Trump.

Though it went up fast under Obama, that was mainly in his first 2 or 3 years and can be blamed mostly on the crash of '08. This current surge of national debt cannot be blamed on anything like that, but is a voluntary choice by Trump and the Republicans, who could realistically have kept the deficit down.

So Trump and the Republicans have to be given most of the credit for the current economic surge.

Remember -- if we want more "growth" and "job creation" to make America great again, we have to follow the innovative Trump formula of increasing the national debt another trillion bucks every year. And to keep it going, that will have to increase to 1.5 or 2 trillion per year -- whatever it takes to keep America great and impose greater and greater debt onto the future.

Sarcasm? Right?

Yes, I also took his post as being sarcastic. It's generally a great source of embarrassment for republicans that deficits go up when republicans are in charge and down when dems are in...

 

[PyramidHead]

Too many possible answers to that excellent question imo. Not many of them involve things that I am expert in. But yeah.

- - - Updated - - -

Yup, it was soooooo stable before the Neoliberals took over. We should go back to the gold standard!

I don't think Pyramidhead was suggesting that it necessarily had to do with neoliberals taking over as such. I took it as a general comment about modern (American) capitalism, if anything.

Oh no, you're right. I'm wrong. He was. Whoops.

No, he wasn't. Pointing out that the current system is bad does not equate to saying the prior system was better. Neoliberalism was certainly an improvement over slavery and feudalism.

 

[Lumpenproletariat]

Does Trump deserve some "credit" for the better numbers?

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View attachment 18638

Lumpen, if the dates were removed, you would not be able to tell where Bonespurs took over.

Here's the short version -- There are some improved economic numbers, in 2017-2018, over 2016 and earlier, and these are due to Trump's new federal deficit increases, which are high enough to explain the better numbers.

Now the Wall of Text version to explain it accurately -- There are at least 2 economic improvement numbers which can be cited:

1. higher "economic growth" numbers in 2017-2018. Here the numbers are clear, as we have hit above 3% and even 4% quarterly.

Actually, "economic growth" is not all good, necessarily, because it includes bridges to nowhere and other waste. Every wasted tax dollar is an increase in "economic growth" of the nation. Nevertheless, most Americans, including economists, preach "economic growth" as a religion, so if you go along with this popular sentiment, you have to say that Trump has done something right, or at least, this one indicator is positive.

And probably most of the "economic growth" is something good.

2. the "job creation" numbers. Yes, the pattern of lower unemployment and "job growth" looks steady from Obama into the Trump years. But this is part of the "economic recovery" happening steadily from about 2009-10 up to the present, and usually any such recovery sees a leveling out of the "job growth" and the unemployment rate at some point.

But this leveling out has not yet happened. Usually the unemployment rate goes down to below 5% and levels out. To 4.5% or so. It seldom goes even lower, to below 4%.

So the years 2017-18 have seen the "job growth" and improved employment numbers reach beyond the normal recovery levels.


The important point is that this is best explained by the greatly increased federal deficits, or higher national debt under Trump. This is an "economic stimulus" considerably greater than necessary to cause the improved economic numbers. And so this is probably the explanation for the boom Trump is giving us.

I.e., this is his magic economic formula to Make America Great Again.

And by contrast, the boom of the late 1990s was NOT due to any such increase in debt, because those years were low or zero budget deficit years.