GOP, The Party of the Past That Should Be Doomed To Final Failure…

I was once a republican. I believed that maintaining the national debt at a manageable sustainable level is important. The Republican party said they did as well.

I believed that annual budget deficits were often unavoidable during recessionary cycles but knew that during grow cycles budgets needed to be balanced in order to be able to sustain a manageable national debt level. I thought te Republican party believed the same.

I was wrong on both counts as the Republican party has been most responsible for our national debt explosion every since Ronald Wilson Reagan was our president. It continues under Trump unabated and NO ONE  in the Republican party is even talking about the national debt or budget deficits any longer.

It’s like no one cares anymore. Likely that is because they don’t. The Republican Party aversion to raising taxes during growth cycles is stuff of legendary proportions. Even though that is how debt control works. Reducing taxes to “stimulate economic growth” is something we’ve seen time and again just doesn’t work. The national debt stands as a monumental statue to that fact.

The Party of Lincoln (actually it no longer is) has become the Party of the Wealthy , By the Wealthy, and For the Wealthy. Its primary focus is to insure that wealth remains concentrated in the hands of those occupying the top 1 or 2 percent on the economic scale. A sure tract to oligarchy.

Below excerpt is from The New York Times.

… The financial crisis of 2008 and 2009 left the vast majority of working people and the Democrats’ base of African-Americans, Hispanics, single women and millennials shattered for years. They lost much of their wealth and were forced into new jobs that often paid less. Many faced prohibitive student debt. With wages stagnant for a decade, they were frustrated with the daunting costs of health care, prescription drugs, child care and housing. Yet in the main, Mr. Obama, Hillary Clinton — and now Mr. Trump — hailed the economy’s progress, the millions of new jobs. But that was and is clueless. Mr. Trump will be the latest presidential candidate punished by the voters for not getting it.

The Democrats in the 2018 wave election did get it and made their biggest gains, compared with 2016, not in the suburbs — despite winning most of their new seats there — but in the rural areas and among white working class voters, particularly women. This pullback from Mr. Trump among white working class women in particular went further this year. As of 2019, he enjoyed only a single-digit lead with the voters who played such a big role in the 2016 surprise. In 2018, Democrats succeeded by attacking Republicans for attempting to repeal Obamacare and failing to lower skyrocketing prescription drug costs. They proposed trillion-dollar investments in infrastructure and battled to drive dark money out of politics.

Mr. Trump and the Republican Congress continued to seek the repeal of the Affordable Care Act, working both to make it fail in practice and to slash federal health care spending for seniors and the poor. That made health care the top reason for voting for Democrats in 2018, but it also revealed what has become a defining partisan difference: a Republican Party determined to destroy government outside of defense and a Democratic Party determined to use it expansively.

The Democrats today are reacting not only to Mr. Trump but to the Tea Party-dominated Republican Party that preceded and prepared the way for him with gridlocked government. After coming to power in the 2010 wave election, the Republicans tried to keep the government from addressing virtually any problem at all. The Tea Party movement was animated by its hostility to Mr. Obama and his activist government. Empowered in the House, it forced an I.M.F.-like budget austerity on the federal government and blocked any new economic stimulus and investment. As a candidate, Mr. Trump built his base among Tea Party Republicans and Evangelicals in order to carry forward the assault on government nationally and in the states. The Democrats watched in frustration as the government was presumed to be impotent to address wage stagnation, surging inequality, climate change, the slaughter from automatic weapons and the flood of dark money into politics.

But this dam has burst. With Mr. Trump’s ever-escalating assault on government, the proportion of Americans who say that government “should do more to solve problems and meet the needs of people” surged to the highest level in 20 years. Democratic candidates who understand this political moment will push for a government that changes the country’s course, as it did under Democratic presidents after the progressive victories of 2008 and 1964 and especially after the 1932 triumph of Franklin D. Roosevelt and the New Deal.

Democratic voters today look at the chief executives of major corporations and they see the face of an era where greed was unchecked, where companies failed to invest in their workers and used their big donations and lobbyists to rig the political system against the middle and working classes. They are determined that government must do something not only about corruption and corporate excess, but also inequality, universal health care, the state of the working family, climate change, globalization, entrenched racial and gender disparities and more…

Democrats have an amazing opportunity to take back America for the middle class and those less fortunate. But, the mega guns of the Republican party and its wealthy donors are gearing up for the monumental fight they KNOW is coming. Independents and Democrats need to unite to destroy the seeds of Trumpism before it destroys America.

Full article BELOW the FOLD.

Here We Go AGAIN…

Conservatives NEVER learn. Eleven years after the federal government placed Fannie Mae and Freddie Mac under tight federal oversight on the heels of the 2007-2008 financial crisis Trump and his minions want to privatize the institutions.

Mark my words, it will only be a matter of time before we find ourselves dealing with anther crises of similar or greater magnitude. Unless the organizations remain closely monitored history will repeat itself.

On Thursday, the Wall Street Journal reported that President Donald Trump is interested in privatizing the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), a pair of government-sponsored enterprises that together guarantee about half of the mortgages in the United States.

The Treasury Department insists that they want to privatize the agencies in a way that would not decrease access to credit. According to the Wall Street Journal, these changes would take years to implement, and existing mortgages would be unaffected. The government would also continue to backstop the agencies even after they are privatized.

Fannie Mae and Freddie Mac are responsible for repackaging loans into securities to sell to investors. The government assumed tight control over them during the 2008 financial crisis to prevent their collapse.

Members of both parties have suggested abolishing the enterprises for years. Republicans in particular have tried to blame Fannie Mae and Freddie Mac for the financial crisis, although this argument is specious.

SOURCE

 

Our High IQ president

The Truth Regarding Tax Cuts……

Republicans favorite meme is that tax cuts spur economic growth, thereby increasing tax revenues and as a result pay for themselves. The only problem is the facts just don’t support the meme.

The release of Trump’s tax plan comes with an expected debate and a familiar question: do tax cuts pay for themselves? The answer is, probably no,. But this doesn’t stop people from bringing up this argument when tax reform is proposed. I mean, you can’t blame them – cutting taxes boosts economic growth, which increases taxable income, and therefore increases revenue collected.

However, this logic is too simple and doesn’t account for other factors that impact the federal budget. It’s not a political issue, it’s simply fact. According to Politifact,“there’s no real evidence in the last 20 years that growth from tax cuts has made up lost revenue.”

This article will explain why tax cuts and overall tax reform can make the economy more efficient, but tax cuts in and of themselves don’t balance budgets.

Republicans are right that tax cuts spur economic growth and tax revenues increase. As long as the economy is expanding. But so does government spending.

It’s nice to talk about theory, but is the math behind self funded tax cuts even feasible? How much economic growth will you need to make up for lost revenue? When will you break even? Well, we talked about the theory, so let’s dive into the numbers.

Lets start with the revenue side of the equation.  Since the 1940’s the federal government has collected, on average, 17% of Gross Domestic Product (GDP) annually. This means that for every dollar of GDP, the US government collects 17 cents through individual, corporate, payroll, and excise taxes.

It’s estimated that Trump’s tax plan could cost anywhere from $3 trillion to $5 trillion over the next decade. So, essentially, Trump’s tax plan would have to generate $17.6 trillion to $29.4 trillion over the next decade in additional GDP growth. How did I come up with these numbers? Simple, if the US government collects taxes approximately 17% of GDP, then you would need $17.6 to $29.4 trillion in additional GDP to make up for the loss in revenue.

Assume that the current economy is growing at an average annual rate of 2%. If you gave a $5 trillion tax cut over the next decade, you would need to generate consecutive growth of 4.4% over the next decade. If you were more conservative and gave a $3 trillion tax cut, then you’d only need consecutive annual growth of 3.5%. If you give a $2 trillion tax cut, then you’d only need 1% more growth in GDP year after year.

These growth rates seem achievable, especially considering the most recent quarter of GDP growth at 3%. But is the math really this simple? Proponents of self funding tax cuts would say yes and leave it at that. But there is another side to the equation – government spending.

Like tax receipts, federal spending has a direct relationship with GDP. On average, federal spending has been at or around 20% of GDP over the last few decades. So what does that mean? Well, simply put, if your tax receipts are 17% of GDP and your outlays are 20% of GDP then you’ll have a budget deficit each year of about 3% of GDP.

If the entire point of tax reform is to reduce the amount of taxes the government collects as a portion of GDP, then you’ll always run a deficit. Even if federal spending decreases on its own due to fewer people collecting government assistance, you’ll still run a significant deficit year after year. Why is this?

Well, with a bigger economy comes increased cost simply due to inflation. Since many government assistance programs are tied to the consumer price index, government spending will naturally increase year after year. Same goes with wages for government employees, equipment purchased through military spending, and even interest paid on federal debt.

Simply put, tax cuts do not pay for themselves because they don’t offset increased government spending. Don’t believe me? Well, just look at the data – even with periods of strong growth, the last time federal spending was below 17% of GDP was 1966.

Source Article

Does ANYONE actually believe our government (or general populace for that matter) has the discipline or smarts to correct the error of the past 53 years? My vote is an emphatic NO.

Rep. Kevin Brady (R-Tex.), a primary architect of the GOP tax bill, has acknowledged that  the tax cuts may not fully pay for themselves. It is very likely that Mr. Brady has known the aforementioned facts all along, as has his fellow republicans, but winning elections is ALL that matters to present day republicans. And Trump is a present day republican on steroids. So, get prepared for continued spiraling deficits and an ever bloated and bulging federal debt.

The Washington Post – Rep. Kevin Brady (R-Tex.), a lead architect of the GOP tax bill, suggested Tuesday the tax cuts may not fully pay for themselves, contradicting a promise Republicans made repeatedly while pushing the law in late 2017.

Pressed about what portion of the tax cuts were fully paid for, Brady said it was “hard to know.”

“We will know in year 8, 9 or 10 what revenues it brought in to the government over time. So it’s way too early to tell,” said Brady at the Peterson Foundation’s annual Fiscal Summit in Washington D.C.

The federal government’s deficit typically shrinks during strong economic times, but the deficit is up nearly 40 percent so far this fiscal year, according to the latest Congressional Budget Office report released Friday.

Spending is up $255 billion for the first eight months of the fiscal year, the CBO said, while revenues are up only $49 billion. Corporate tax receipts are down after Republicans enacted the largest reduction in business taxes in U.S. history. Individual income taxes are basically flat this year (they are growing less than the rate of inflation). Most of the revenue increase is coming from President Trump’s tariffs and more payroll taxes, which were not cut in the tax bill.

“Revenue fell, it didn’t rise, after the tax cuts,” said Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget.

Brady’s comments are a marked departure from the claim many Republicans made during the tax bill debate that the tax cuts would be fully paid for by additional economic growth that would, in turn, spur additional tax revenues for government coffers.

Numerous independent analyses concluded that the tax bill would add substantially to the U.S. debt, which currently stands at $22 trillion. CBO estimated the total cost of the Tax Cuts and Jobs Act is $1.9 trillion — after taking into account additional growth and interest payments.
Republicans are ALL Keynesians now. Only they accept deficit spending in spades, ALL the time. They missed the part about raising taxes during BOOM times and lowering taxes during BUST times. In other words they got it all bass ackwards.

The Dishonest Man In The White House……

When The Donald tells you something, anything actually, be prepared to check, check, and check again with knowledgable and credible sources. Why you ask. The answer is simple and straightforward. Because with over 10,000 verified mis-statements and outright right lies who in the hell can trust anything he says? I know I sure don’!

President Donald Trump is justifying raising tariffs on Chinese imports on grounds they are helping the U.S. economy and are mostly paid by China. The opposite is true, economists say.

According to data from U.S. Customs and Border Protection, almost $15.3 billion in duties imposed by the Trump administration last year were assessed on imported goods from China as of April 10. Actual collections could lag and be lower with refunds and other factors.

While Trump has suggested on Twitter and in public comments that tariffs are somehow being charged to or paid by China, economists say that’s misleading. U.S. importers are responsible for the duties, and ultimately U.S. businesses and consumers pay through higher costs, they say.

“Our results imply that the tariff revenue the U.S. is now collecting is insufficient to compensate the losses being born by the consumers of imports,” a study published in March by economists from the Federal Reserve Bank of New York, Princeton University and Columbia University concluded.

SOURCE

 

Trump Beefing Up the Trade War With China……

There are arguments for and against increasing tariffs on goods imported from China to narrow the US trade deficit with emerging economic giant.

Trump has announced his plan to increase tariffs from the current 10% to 25% this coming Friday. The result of stalled trade talks.

Regardless of the effect on the trade deficit American consumers will pay more for goods imported from China. While US importers of Chinese goods pay the tariffs it is the American consumer that ultimately sees the increase in their cost of living. Businesses simply pass the increased costs on to consumers.

President Trump tweeted on Sunday that tariffs on $200 billion of Chinese goods will be raised from 10% to 25% on Friday, as trade talks between the U.S. and China progress “too slowly.

 

“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate.”

“No!”

The backdrop: In February, U.S. trade representative Robert Lighthizer told Congress that the U.S. had temporarily dropped its plans to raise the tariff rate to 25%, as the two sides inched closer to striking a deal.

  • Reality check: Trump has repeatedly claimed that tariffs have caused China to pay billions of dollars to the U.S. treasury. This is incorrect. The tariffs are paid by U.S. importers of affected Chinese goods, not by China’s government or by Chinese companies. Importers then either raise costs on consumers, lower their own profit margins or both.

Driving the news: Chinese Vice Premier Liu He — along with a 100+ person delegation — will be in Washington on Wednesday, per the Washington Post, for another round of trade talks. Sources have told CNBC that a trade deal could possibly come as soon as Friday, a day after the latest numbers on the U.S. trade deficit are released, though Trump’s latest tweets suggest otherwise.

Go deeper: Grading the impact of Trump’s China tariffs

SOURCE