Joe’s economy still healthy: GDP expands +2.9%

Trump very much juiced the economy, huge deficits, leaned on the fed to not raise interest rates, all at a time when the economy would have been fine without them.

 

If you remember, unemployment rates were dropping at a consistent level the last 6 years of Obama and the first 3 years under Trump. And quarterly growth rates were between 2.5% and 3% every quarter. Longest history of continual growth in the economy since we started tracking, if I remember correctly. All signs of a mature economy, which is one where there is continue, slow growth.

But having a mature economy with just under 3% growth wasn't good enough for Trump, who promised growth rates of 5% or more! And what did Trump do to try and achieve these rates? Huge tax cuts and massive increase in government spending. But mature economies don't derail or accelerate quickly, and the results of all of Trump's cuts and spending were negligible. As an old acquaintance used to say, it's like pouring camel piss on an engine. Going to smell like hell and make you believe it's doing something, but all it's doing is smell bad.

What we do have is the consequences of Trump's tax cuts and spending. And that's a huge increase in the national debt. And this was recorded before the pandemic. The pandemic only made the deficits worse, but Trump was helping before things went completely awry and something finally derailed the mature economy. And that something was a global pandemic.

So no, Trump didn't have the trillions in pandemic stimulus. But he did have trillions in far-reaching tax cuts and trillions in other increased spending instead. What he should have been doing is what a real fiscal conservative would have done. Targeted tax cuts along with small spending decreases. Growth rates would have remained about the same, but we could have slowed down the deficit spending, and in fact, may have been able to reverse course a bit and pay some of it down. But this path would have guaranteed growth rates between 2.5% and 3% per quarter, and Trump wanted his 5%.

As for the current economy, with supply lines getting back to normal, it looks as if we are back on course on a mature economy. Still a lot of question marks and economically, the pandemic may still not be over. It's hard, if not impossible to predict, because it's been a century since the last global pandemic, and we really don't know how long the effects will last, nor what those effects will be.

 

Actually he leaned on the Fed not to raise rates, and when they did it caused a slow down that quite a few liberals hear cheered about. Then they were forced to lower them to keep things from stalling out.

 

Fact is you want to ignore the massive spending that was forced due to Covid coupled with an economy shut down due to Covid. That’s was a huge jump to the debt.
You chose to ignore the extra 1.8trillion Biden decided to tack on after the economy was already recovered post covid for no good reason. ( and then you try to ignore that gov juicing the economy had anything to do with the record inflation).

Why hasn’t the budget retuned back to pre covid numbers since Biden took over?
They all love to pump out the Gov cheese man.

 

We've heard your explanations before. Thing is, the data tells a different story, for the most part. Here's national debt under both Obama and Trump. Notice the trend after Trump takes office and before the pandemic.


Here's US Federal expenditures. Note, this was taken in 2020, before a dime of pandemic monies were spent.



Notice the trends of deficit and spending during Trump's first three years before the pandemic hit? Like the stairs in the original Ghostbusters, they go up. Again, Trump was trying to supercharge the economy to get his promised 5% growth rates. The theory may have been, reach growth rates this high and the tax revenues would offset cuts and spending, and you can still potentially pay down the debt. Problem is, getting growth rates at 5% during a mature economy is impossible. And Trump's pre-pandemic fiscal actions had the effect of more spending, more debt, but no more growth than before. Too bad too, because if you look at the deficit chart again, you notice it flattens during Obama's last year! Had Trump been a true, fiscal conservative, and cared about the country more than himself, he could have done a few, targeted tax cuts, a few, targeted spending cuts, and the economic growth wouldn't have been effected. And instead of ballooning the deficit, we could have begun to pay it down.

We would have been in much better shape when the pandemic hit, and increased Federal spending became a necessity. And yes, the Fed spending did play a part in inflation. But it wasn't the biggest factor. Much of the government spending replaced income that people lost because of pandemic caused job loss. And because of pandemic caused job loss, supply chains around the world became inefficient, and in some cases, supply paused completely. It's why the entire world experienced inflation. As for the stimulus? We can argue it was too much, and pushed inflation a little higher than necessary. But as this article states, the stimulus may have caused 3% of the inflation, which is less than half.

 

They aren’t just my explanations, it’s fact.
Yeah I see the trend is going up an even pace and the the pandemic hits and boom. That’s for making my point.

Causing almost 50% of the inflation is a huge amount to just ignore that is silly.
Fed budget 2017- 4.146 Trillion Obama
Fed Budget 2018-4.1 Trillion Trump
Fed budget 2019-4.4 trillion Trump
Fed budget 2020-6.55 Trillion Trump
Fed Budget 2021-6.8 Trillion. Trump
Fed Budget 2022-6.27 Trillion Biden


See the huge jump in the budget, What happened in 2020?
Off course the debit would ballon increase the budget by 50%, shut down the economy (less taxes paid). Duh the debit will go nuts.
I’d argue if Hillary was in office it would have been worse as they would have tried to shutdown more of the economy than they did.

Thank God Biden passed the inflation reduction act… LMAO that does nothing to stop inflation

 

You just switched gears from debt to spending. The point you are missing is that even prior to the pandemic Trump was pushing deficits to record levels during peacetime and prosperity, when deficits should be decreasing. A big reason were his tax cuts.

Yes of course Covid ballooned the deficit. But when things are going well then you shouldn’t be running up the debt.

 

I don't think that is what he said. And where are these conservatives that you speak of? What is your definition of conservative.

My husband and I can believe how much that guy looks like our youngest son, with the sunglasses, not without

 

If Hillary was in office she wouldn't have thrown away the Pandemics for Dummy's handbook and she would have acknowledged the problem before it hit our shores, lessening (hopefully ) the effect/deaths we had.

 

Looking at just the deficit, there was a time at the end of Obama's admin and right before Trump took office where it was flat. The growth of the deficit at the beginning of Obama's admin made sense. We were coming out of a recession. But, by the end of Obama's admin, we were in good shape, with a mature economy, low unemployment that was trending even lower, and solid growth. But these weren't good enough for Trump. He wanted his 5% growth rates, and started drastically cutting taxes and spending more.

Had Trump been a true, fiscal conservative, he would have done targeted tax cuts and spending cuts, and instead of the deficit growing again like it did under Obama, it would have started going the other way. Again, look at the graph right at the end of Obama's tenure. It was flat. It wouldn't have taken much to start paying down the deficit, especially given the market conditions at the time.

Nobody is denying the huge increase in deficit spending because of the global pandemic. Nor that it had an effect on inflation. But it didn't make up half of inflation. 3% max, at a time where we averaged over 8% in most months. And at a time where global inflation was around 7.5%. And again, the pandemic spending was a necessity.

We would have been in much better shape had Trump not tried his camel piss to supercharge the mature economy and get his 5% growth rates. All that did was grow the deficit without changing growth rates much, if at all. And I agree that Hillary wouldn't have chucked the Pandemic Playbook, and would have listened to the experts from the start. She also likely would have been happy continuing with Obama's course on the economy. Maybe the deficit grows under Hillary? Maybe not. But the deficit wouldn't have grown as quickly under Hillary, because she wouldn't have fruitlessly tried for 5% growth that was impossible given the conditions at the time.

 

Doesn’t what you just said mean we no longer have inflation? I am no economist but lowering prices means deflation not inflation.

 

I should have said the rate of inflation, not inflation itself.

 

So you mean over a longer term? It has been going down for about 6 months now. The high inflation rate is trending down even with good job numbers. It is hard to see anything but partisanship in people complaining about the economy.

 

Yeah year over year, it’s fallen from 9 percent to 6 or whatever it is now. So it still higher than it should be, but more reasonable and coming into line with historical norms, even if the last decade and change has been unusually low.

 

There was no way to avoid it hitting our shores. Unless we totally shut down any travel into or out of our country in mid January of 2020. HRC wasn’t gonna do that.
Nothing would have changed. The response would have been far more draconian and cause much more economic damage than was done.

 

You can’t talk debt/deficit with out discussing spending. The numbers clearly show the debt/deficit was on about the same track it had been for years before COVID hit.
But choosing to ignore the fact that the budget went from about 4.4 Trillion to 6.8 Trillion in the covid year is disingenuous. The clear had the biggest impact and would have regardless who was in the WH.

 

I would suggest that had HRC been in charge the shutdowns would have been deeper and more widespread , the decrease in GDP would have been worse and the increased spending would have been bigger causing an even bigger jump in the deficit/debt.

 

There are going to be times when you have to run large deficits like Covid and Great Recession. You can argue we overdid the Covid stimulus but regardless there would be large deficits. These are cyclical deficits.

The issue is we have been running significant deficits even when the economy has been doing well. These are structural deficits. Since 2000, much of the structural deficits have been generated by republicans - Bush and Trump tax cuts, Bush unfunded Medicare expansion. Also you had probably another trillion in Iraq. In terms of democratic spending expansions, they have been largely funded by more taxes or spending offsets - such as ACA and IRA.

 

I said she would have acknowledged the problem before it hit our shores, not that iit wouldn't have. trump pretended it was nothing more than the flu. There was a lot of preparing for a pandemic, but the admin in place ignored it. Over 1m people died, we could have lessened that.

 

Anyone remember this?

Trump also made a statement to the effect that Covid would shortly disappear and referred to concern over Covid as "the new Democrat hoax".
https://www.cnn.com/interactive/2020/10/politics/covid-disappearing-trump-comment-tra
https://www.nbcnews.com/politics/donald-trump/trump-calls-coronavirus-democrats-new-hoax-n1145721cker/