From Alec Phillips, David Mericle and Tim Krupa (Goldman Sachs, 3 September 2024):
3 thoughts on “Goldman Sachs on the Post-Election Economy”
pgl
That GS had the Trump effect on real GDP in the early years being quite negative is no surprise. I have one question, however, about the fiscal impacts in both scenarios. Assuming we are near full employment – one would think fiscal stimulus would raise interest rates crowding out investment. Does the GS model incorporate this?
Menzie – the Biden/Harris administration has had an extraordinarily successful presidency. “Through August 2024, the employment report indicated positive job growth for 44 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).” https://www.calculatedriskblog.com/2024/09/comments-on-august-employment-report.html They managed to do this despite starting on Day 1 following a violent insurrection, 10% unemployment, Trump’s disastrous management of the pandemic, and Trump officials refusing to turn over documents and instead burning them to cover their corrupt tracks. https://www.msnbc.com/rachel-maddow-show/maddowblog/many-meadows-burn-docs-white-house-fireplace-rcna63463
As Simon Rosenberg says”Growth here has been far above the growth in other advanced economies. We’ve had the best job market in 60 years. The lowest uninsured rate in history. Record levels of new business formation. Wage growth has outpaced inflation. The stock market is setting records. Joe Biden has made historic investments in our economy and workers that will be creating jobs and opportunity for the American people for decades to come. We’ve dramatically accelerated the energy transition necessary to keep the planet from warming. We’ve beaten inflation – a global phenomenon – and interest rate cuts are coming now. We are more energy independent today than we’ve been in decades. Crimes rates which had gone up under Donald Trump have come down under Joe Biden. The deficit which skyrocketed under Donald Trump has come down under Joe Biden. Despite reckless Republican obstruction, flows to the border are lower today than they were under Donald Trump.” https://www.hopiumchronicles.com/p/joe-biden-has-been-a-very-good-president
Can the corporate media/their wealthy overlords finally admit the U.S. economy does better when the Democratic Party is in charge and practicing responsible governance and what we get with the GOP is de-funding of government, less healthcare, tax cuts for billionaires, and cutting regulations that lead to less worker protections, fewer checks on financial predators and ultimately speculative bubbles in the market, The GOP also wants to take away reproductive healthcare choices and ban books and ban any history lessons in schools that do not promote their white male supremacy view.
This is why we need Joe to stick around. This kind of success is not just post-Covid catch-up and luck. Kamala is a relative youngster – that’s what the public was convinced it wanted – so however wise and good she may be, having a guy like Joe nearby to bat down stupid ideas is a good thing. The world is full of stupid ideas, and politics tends to concentrate those ideas near the seat of power.
That GS had the Trump effect on real GDP in the early years being quite negative is no surprise. I have one question, however, about the fiscal impacts in both scenarios. Assuming we are near full employment – one would think fiscal stimulus would raise interest rates crowding out investment. Does the GS model incorporate this?
Menzie – the Biden/Harris administration has had an extraordinarily successful presidency. “Through August 2024, the employment report indicated positive job growth for 44 consecutive months, putting the current streak in 5th place of the longest job streaks in US history (since 1939).” https://www.calculatedriskblog.com/2024/09/comments-on-august-employment-report.html They managed to do this despite starting on Day 1 following a violent insurrection, 10% unemployment, Trump’s disastrous management of the pandemic, and Trump officials refusing to turn over documents and instead burning them to cover their corrupt tracks. https://www.msnbc.com/rachel-maddow-show/maddowblog/many-meadows-burn-docs-white-house-fireplace-rcna63463
As Simon Rosenberg says”Growth here has been far above the growth in other advanced economies. We’ve had the best job market in 60 years. The lowest uninsured rate in history. Record levels of new business formation. Wage growth has outpaced inflation. The stock market is setting records. Joe Biden has made historic investments in our economy and workers that will be creating jobs and opportunity for the American people for decades to come. We’ve dramatically accelerated the energy transition necessary to keep the planet from warming. We’ve beaten inflation – a global phenomenon – and interest rate cuts are coming now. We are more energy independent today than we’ve been in decades. Crimes rates which had gone up under Donald Trump have come down under Joe Biden. The deficit which skyrocketed under Donald Trump has come down under Joe Biden. Despite reckless Republican obstruction, flows to the border are lower today than they were under Donald Trump.” https://www.hopiumchronicles.com/p/joe-biden-has-been-a-very-good-president
Can the corporate media/their wealthy overlords finally admit the U.S. economy does better when the Democratic Party is in charge and practicing responsible governance and what we get with the GOP is de-funding of government, less healthcare, tax cuts for billionaires, and cutting regulations that lead to less worker protections, fewer checks on financial predators and ultimately speculative bubbles in the market, The GOP also wants to take away reproductive healthcare choices and ban books and ban any history lessons in schools that do not promote their white male supremacy view.
This is why we need Joe to stick around. This kind of success is not just post-Covid catch-up and luck. Kamala is a relative youngster – that’s what the public was convinced it wanted – so however wise and good she may be, having a guy like Joe nearby to bat down stupid ideas is a good thing. The world is full of stupid ideas, and politics tends to concentrate those ideas near the seat of power.