So sayeth Donald Trump today. From FoxBusiness:
“My biggest threat is the Fed,” Trump said on Tuesday during an interview with FOX Business’ Trish Regan. “Because the Fed is raising rates too fast, and it’s too independent,” he complained.
To recap, the Fed’s increase in interest rates is by most criteria fairly modest. Consider the implied Fed funds rate assuming no interest rate smoothing, the Laubach-Williams one-sided estimate of the real natural rate, and a target variable of 4 quarter PCE inflation.
Figure 1: Implied Fed funds rate, using CBO output gap, Laubach-Williams one-sided estimate of real natural rate, PCE 4 quarter inflation, and no interest rate smoothing. Source: Atlanta Fed.
If we use the traditional 2% real natural rate instead of the Laubach-Williams estimate, we get an even larger deviation of actual from implied.
Figure 2: Implied Fed funds rate, using CBO output gap, 2% real natural rate, PCE 4 quarter inflation, and no interest rate smoothing. Source: Atlanta Fed.
The actual is 2.76 percentage points below implied, instead of a (mere) 1.62 percentage points.
Just a thought: Venezuela’s Hugo Chavez sought the destruction of an autonomous central bank. Read the story, here. I am constantly amazed at how many purported conservatives are happy with Mr. Trump’s attacks on the Fed.
Dear Donald,
If you have a problem with the FED it is because you are running a structural budget deficit of around 6% at the height or thereabouts of the business cycle.
As I made pretty clear in my most recent comments in this blog (in Hamilton’s post), I do have some problems with the way the Fed does things. However, as much as some decisions and lax “regulation” (or complete absence thereof) of TBTF banks royally annoys the hell out of me, I STILL support independence of the Fed. Not that that’s earth-shattering info, just saying as a citizen out here, I understand what the situation is and how generally important Fed independence is.
Stanley Fischer’s thoughts in late 2017: https://www.federalreserve.gov/newsevents/speech/fischer20170928a.htm
simply imagine the damage to the economy both short and long term if trump could actually control the fed at his whims. unfortunately, some folks on this board would actually support trump controlling the fed.
Couldn’t just hang with Janet Yellen, no, had to have his own guys. He only hires the best!
Professor Chinn,
Does it seem like the market should continue to push treasury rates significantly higher due to the slow-down in tax collections, increasing deficits and perhaps a slow-down in Chinese treasury purchases?
Also, with the GDP now seemingly at the potential level does it seem that inflation should start to surprise on the upside? The Atlanta Fed is forecasting 2018Q3 GDP at 4.0% as of October 15 (next update is October 17), while the New York Fed forecasts Q3 at about 2.2% as of October 12. Amazingly, the St. Louis Fed is forecasting Q3 at 4.5% as of October 12.
Excluding the private inventory adjustment, my hobbyist forecast senses that the underlying GDP growth rate is about 2.2% to 2.5%. I think that the “money ball” forecast this quarter is the private inventory adjustment.
@ AS
If I’m not getting things jumbled in my mind, I think I have strongly disagreed with you on at least a couple issues before. So it’s kind of humorously ironic that I pretty much agree with you on your “hobbyist” GDP quote. I see it as anywhere between 2–2.5%, and certainly nowhere over 2.9%. I suppose Menzie would just call us two blind men. And maybe he’s right. Certainly “2slugbaits” disagrees and feels it’s foolish not to basically trust the BEA on the GDP number. All I can say is when the dogma gets so strong that people take numbers with near certainty—it’s usually a sign of a blind spot somewhere. Remember when Alan Greenspan was God and Congressmen sat there listening to Greenspan’s mumbo-jumbo like he was Joseph as Egypt’s Vizier?? Because I sure as hell remember it. Greenspan thought free markets were like Tarot card “magic” and regulated themselves.
https://www.nytimes.com/2008/10/24/business/economy/24panel.html
https://youtu.be/R5lZPWNFizQ?t=91
People can unconditionally trust the BEA numbers and take on know-it-all tones in their voice and writings. But that 4%+ GDP number is a crock of shit. And anyone who believes that 4%+ number, is living in a different economic sphere than the one I reside in—-real….. or otherwise
I trust the BEA. Macroeconomic Advisors is forecasting a 2.0% annualized inventory adjustment. Add a 2.0% inventory adjustment to my 2.3% “underlying” GDP forecast and this equals 4.3%. It is very difficult to forecast the private inventory adjustment.
@ AS
This is what I mean about us disagreeing. You can’t have it both ways. You can’t say you “trust the BEA” and then pull numbers out of your ass that are in TOTAL divergence with the BEA numbers. And with all due respect, WTF does “underlying” mean?? If you’re going to try to fake being a technocrat with empty terminology at least have some links or some numbers to support your bullshit narrative.
Do I have numbers or links to support my 2%–2.5% GDP contention?? NO I do not, but at least I’m honest and admit it’s an intuitive or gut feeling.
I do have numbers from forecasts that do not explicitly forecast the change in private inventories. My forecasts range from 2.3% to 2.8% for a simple ARIMA forecast. Last quarter my models forecast GDP at about 4.7%. Actual was 4.2%. I think my forecast difference is the change in private inventories, which is very difficult for me to forecast explicitly. My favored model uses a mixed frequency approach known as MIDAS in EVIEWS software. For the past many quarters, the forecast and actual are remarkably close, so I am puzzled. Again, I think the big difference this quarter is the private inventory change. Econbrowser does not provide the ability to post EVIEWS models, otherwise I would. I am sure the expert readers know much better than I do concerning the forecasting issues I mentioned. Why do you need to be rude and profane in your comments?
Bloomberg shares some insights about “underlying” GDP growth. Underlying growth excludes the more volatile elements of GDP. Change in private inventories is one such volatile element of GDP.
https://www.bloomberg.com/news/articles/2018-07-23/u-s-4-gdp-growth-seen-more-luck-of-the-draw-than-new-reality
Slow down in tax collections? It seems Team Trump is telling the morons at CNBC that tax revenues are up! Of course – I had to dissent.
http://econospeak.blogspot.com/2018/10/fiscal-dishonesty-from-cnbc-and-our.html
other than steve leisman, there are few left at cnbc with much integrity when it comes to simply reporting the economy. i find myself tuning into bloomberg more and more. cnbc has a few rather vocal, unabashedly pro trump hosts who do the financial and investing viewers a huge disservice with their commentary. at one time it was the go to tv network, but that time has passed. their website is marginal, but allows you to bypass the garbage promoted by some of the hosts.
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Keynes – what does he know? Trump has the Kudlow! Hugo Chavez monetary policy, go go go! Now when inflation hits double digits, Trump can brag about growth rates = 15% per year. What you say? Nominal v. real. His base would not know the difference. Just ask CoRev!
The Feds ‘independance’ from the concerns of the labor force and blue collar workers (or any workers) should be a concern for everyone. Probably not what Donald was getting at…….
So the FED has to raise interest rates because of Trump’s huge structural deficits overheating the economy. Not to worry….right on cue our Friends of the Plutocrats have the answer: Cut Medicare and Social Security!!! Gee, who could’ve seen that coming???
https://www.msn.com/en-us/news/politics/mitch-mcconnell-calls-to-cut-social-security-medicare/ar-BBOtGyE?ocid=spartanntp
Same old bait-and-switch. And as usual our dimwitted electorate will likely fall for it yet again.
After all – that Treasury document I linked to in my post said government spending “surged”. And CNBC repeated this lie. Nominal increase = 3.2% which when adjusted for inflation means likely a 0.3% real increase. Yep government spending as a share of GDP fell but Mitch promised his rich buddies even more tax cuts so time to gut Medicare and Social Security!
Just because an idiot like Trump said it doesn’t make it wrong. The Fed just can’t wait to put their boot on the necks of wage earners to keep labor cheap.
It’s not an independent Fed when it consists of academics and bankers with ties to the financial industry. If you want to have an independent Fed, it needs to include labor and consumer representatives. Please refrain from using the term “independent Fed”. It’s a lie.
For a decade now, the Fed has undershot both their inflation and employment mandates, every meeting wringing their hands saying they need to start raising rates soon — all they way back to 2009!
The Fed’s primary job is to keep labor cheap so that people can have their Ubers driven by lots of underemployed people who can’t find a better job. The Fed is complicit in the transfer of wealth from the middle class to those at the top.
What about the merits of his argument? “Because the Fed is raising rates too fast and it’s independent so I don’t speak to them, but I’m not happy with what he’s doing because it’s going too fast because you looked at the last inflation numbers they are very low.” The Fed has been hiking with inflation below target. This would suggest that policy is already neutral or tight. So, wouldn’t hiking even more be problematic?
Neil: Don’t know if it’s neutral but you have to make some funny assumptions to make it such that the current Fed funds rate is “too high”. But you can pop into the Atlanta Fed utility to see if you can.
(In other words, I don’t see how one can be justified in saying the Fed is “crazy”, “too cute”, etc. Just like it doesn’t make sense to make fun of people with neurological disabilities, or say certain people have “horsefaces”; it’s just more consequential here.)
@ Menzie
When I was around age twelve I started to get the “symptoms” of “a condition” called vitiligo. Mine is quite mild, but it’s where you get white blotches on your skin, which is unpleasant to look at from an appearance standpoint. Usually it’s a condition much more prevalent among African Americans—-so do not ask me, I have no idea how I got it—obviously hereditary, not communicable. There are ZERO health effects from this condition. It only might cause one to be self-conscious about their appearance to others, certainly in your teen years anyway. I grew up in a snobbish suburb (where most adults were probably ruder than the children) and some kids would walk up to me and ask me if I had AIDS. Aside from trying to maintain your sense of self-esteem, you sit there wondering why no adults ever come to your defense. In the long-run, healthy for me, as it helped me to be more able to take criticisms from others without internalizing it maybe so much.
These types are all over the place, and “rest assured” many people I am sure chuckled or out and out laughed reading what you mentioned Trump had said (and other things he has done similar to this). One would like to believe this is largely children’s behavior, but in fact 98% of the time they are copying the behavior they have learned from adults (parents, teachers, etc)
I am not telling a sob story here. Vitiligo has not affected my underlying physical health in ANY way. I feel exceedingly exceedingly lucky. Just wanting to point out that this “grade school” type behavior is very common among American “grown adults”, so Trump is not so “special” in this sense.
prior to his election, trump was advocating that the fed was too loose and should have been tightening-when the economy was not as robust as now. claiming he has merits in his argument is a stretch-he really has no coherent argument regarding how the fed should work, other than whether he can make them change to benefit trump directly. very little concern for benefits to the country and economy as a whole. sometimes trump and the nation align with those benefits, sometimes they conflict. granting him merits in his argument is granting too much-unless we are talking about trump personally.
Haver Analytics publishes its’ monthly estimate of the deficit as a share of GDP.
In Aug it was almost 4.5% of GDP versus just over 3% when Trump took office.
Is it surprising a President wants a slower Fed tightening or a faster easing, including in response to a steep fall in the stock market.
if it is falling from a peak, and limits its downside, why should the fed interfere with the stock market? the stock market and the economy are not the same thing. lots of economic activity operates outside of publicly traded stock markets.
There have been concerns of a inverted yield curve.
it is flatter, it has not inverted. trump seemed to advocate inverting the yield curve while obama was in office, when he criticized the fed for too low of rates. i think there was a greater danger of inverting the curve at that point, than today.
Is it surprising that a President gets a budget busting tax cut passed and then complains that higher interest rates crowd out investment and that a stronger dollar crowds out net exports decides to pretend that none of this matters? Of course not because this President is even more economic illiterate than the clowns like Kudlow who he thinks are economists. Oh wait – I forget, none of this reality was ever learned by PeakTrader when he took that less than a Ph.D. program somewhere in Colorado at some point in time using some text book that PeakTrader cannot remember!
Pgl, too bad Trump wasn’t President in 2009-17, you would’ve seen a much better economy.
You’re in no position to criticize Trump and his economists.
PeakTrader: Trump was president in 2017…employment growth not as good as it was 2016 trend. You might want to read this post. (Or re-read the post — you actually commented on it.)
Menzie Chinn, as I said, the closer we move towards full employment, the slower the job growth.
We’re still not at full employment.
You can’t blame Trump for that.
But just one more tax cut–ONE MORE!–should take care of deficits and retire the debt completely. They say tax cuts pay for themselves. And who are we to argue with they?
Best idea: indexing capital gains to inflation. That will allow working stiffs with lower incomes who have stock portfolios to benefit. Both of them. Everyone wins.
The way it works is tax cuts can close the output gap.
Then, taxes can be raised to slow the economy to a sustainable rate.
When we finally close the output gap, taxes can be raised, along with the Fed at least reaching a neutral stance, which is roughly a 3% Fed Funds Rate.
The Fed may reach a neutral stance by the end of 2019, with four more quarter point hikes.
PeakTrader: What is your reference for a negative output gap? I think CBO, Fed say we are above potential GDP.
Menzie Chinn, Job growth is too strong.
And, monetary policy is accommodative.
The Fed is not behind the curve.
Just for semi-nostalgic fun. Imagine that Friedman’s k-percent rule had been adopted as basic policy by the Fed.
Not that I am saying it would have worked better over the decades, but how much worse could it have been?
(Joachim Scheide has an interesting tweaked version of the K-percent, for those who are curious about current thought).
Ah, not a monetarist myself, just try to be open to roads less traveled.
pgl,
Tax receipts are at record absolute levels, which you concede, and while tax receipts are lower as a percentage of GDP, THAT IS WHAT SUPPLY SIDE PREDICTS. You lower tax rates, which causes growth, which leads to actual HIGHER TAX RECIEPTS and lower percentage of tax receipts to GDP (give the money back to the people, rather than the government)t. I other words, it is working as promised
Now, the expenditure side is another story. Most is on auto pilot spending increases. Is there a lot of fat and waste to be cut out of federal spending? Hell yes there is. But I can only imagine the uproar on here as spending cuts are proposed. Oh the humanity!
sammy: My first term paper in college was in Ben Friedman’s class, assessing the plausibility of supply side stories of the time (1982). Your description of supply side is not what I recall as what Wanniski and Laffer said supply side economics was about. What is your reference?
I read a book about debt when I was in high school that I had a lot of affection for. I can’t swear to it, but I think the author’s name was Benjamin Friedman (although that’s an incredibly common Jewish name, both first and last). I loved the book so much because it was large and was one of the few books at that time that went after Reagan on the debt. I will see if I can find it, and if it is the same guy. To this day it still amazes me the book was in the high school library in a predominantly Republican town. As I remember it had a very bright red cover and blue lettering on the title.
This is the book, which if a teenage boy could “love” a book, then I loved this book.
https://www.amazon.com/Day-Reckoning-Consequences-American-Economic/dp/0394565533
That book, along with Krugman’s “Age of Diminished Expectations”, Krugman’s “Pop Internationalism”, and Krugman’s “Peddling Prosperity” really had a deep impact on my thinking as a young man and inspired me on some levels—>> as in “I and my father are not the only men who hate this bastard Reagan”. When I was, as they say, “bright eyed and bushy tailed”. Whatever that means.
One would think a true supply-side model would talk about things like employment and capital accumulation. Let’s see – the employment to population ratio over the last year has not changed at all. And that predicted investment boom? Still waiting to see it.
“The Laffer curve is one of the main theoretical constructs of supply-side economics, the idea that lower tax rates when tax level is too high will actually boost government revenue because of higher economic growth.”
https://en.wikipedia.org/wiki/Supply-side_economics
Wikipedia University! Do they have a Ph.D. program? The Laffer curve is nothing more than a stupid cocktail napkin.
sammy Art Laffer was responsible for the dummied down version of supply side economics; i.e., the version you’d find in a typical WSJ op-ed piece. If you want a more serious understanding of finding the revenue maximizing “Laffer Curve”, then try this 1971 paper by James Mirrlees:
https://www.jstor.org/stable/2296779?seq=1#page_scan_tab_contents
It was good enough to earn a Nobel Prize.
What intellectual garbage. #1 – real tax receipts FELL. But do repeat the same lies every one else in the White House keep uttering.
#2 – growth last year was not that impressive. But don’t let facts get in the way of your spin.
sammy Oh my, you poor fellow. I’m not a supply side kind of guy, but if I were I would prefer it if you kept quiet rather than make a complete botch of the pro supply side argument. You clearly do not understand how supply side economics is supposed to work. You’re spewing the cartoon version of the theory. Let me help you out. The supply side argument says that cutting income taxes affects the income/leisure trade-off (or “substitution” effect). With a tax cut the opportunity cost of leisure increases relative to work, so people will increase their labor effort. OTOH, lower taxes increase disposable income so people will demand more leisure because leisure is a normal good (i.e., demand increases with income). This is called the “income” effect. The question is which effect dominates. The supply side argument requires that the substitution effect dominates the income effect. The next supply side hurdle requires that the difference between the substitution effect and the income effect must be strong enough to generate more tax revenue than lost due to the tax cut. Ultimately this is an empirical question. I’m not aware of any empirical study that supports the supply side argument at anything like current tax rates. Even Art Laffer agrees that there is no supply side effect at current tax rates. Most studies have found that the marginal tax rate has to be somewhere in the neighborhood of 65%-70% before there is any observable supply side effect. This isn’t 1963 with a top marginal rate at 90%. This isn’t even 1979 with a top marginal rate of 70%. Sorry, but you simply don’t understand the economic arguments, which is pretty sad because this is supposed to be an econ blog.
Speaking of cartoons. Sammy’s text book is Wikipedia! It does not get better than this!
2slugs, you should be required reading for peaktrader, as he constantly misapplies these concepts in the name of lowering taxes. even if those other critters fail to read and understand your comments, i very much appreciate how direct and concise you are able to convey these items that have been bastardized by the media and conservative pundits over the years.
More fake news from Baffling.
When did I say there aren’t optimal tax rates?
And, why do you completely ignore the benefits of supply side economics?
It’s all about big government to people like you at the expense of the macroeconomy.
WTF does any of this babbling even mean? You write unresponsive babble to everything. Benefits of supply-side economics? You have not given a single piece of honest empirical evidence that is even remotely relevant to this discussion. Not one. Just more and more slogans that I’m sure Kudlow asks you to write.
all i’m saying is it would be educational for peaktrader and his jr phd to listen and learn from 2slugs. fake news? just good advice.
PeakTrader No one is buying what you’re trying to sell. As far as I know you’ve never said anything coherent about optimal tax rates. And BTW, in this context the term “optimal” means revenue maximizing. The Laffer version of supply side economics claims that cutting taxes will pay for themselves. If you want to make that claim, then you have to first find the revenue maximizing tax rate, which may or may not be “optimal” in terms of overall economic growth. I’m not an economist, but I’m pretty sure that the consensus view is that the economically optimal tax rate (in terms of economic growth) is well below the revenue maximizing rate. That’s a problem for Laffer style claims because it means tax cuts do not pay for themselves at anything like current tax rates.
But I’m a generous person and I don’t want to leave you in ignorance….you know, it’s that Plato’s cave thing. So here’s a nice lecture on optimal tax rates by Thomas Piketty. Notice Table 5 at the end of the lecture. In no scenario will you find current tax rates are anywhere near the Laffer tipping point.
http://piketty.pse.ens.fr/files/PikettyEcoPub2013Lecture5.pdf
For example. Robert Lucas has done studies on “supply side economics.” He states:
“…eliminating capital income taxation would increase the U.S. capital stock by about 35 percent. This belief in low or zero taxation of capital gains is often attributed to believers in so-called supply-side economics. Lucas wrote, “The supply side economists, if that is the right term for those whose research we have been discussing, have delivered the largest genuinely free lunch that I have seen in 25 years of this business, and I believe we would be a better society if we followed their advice.””
https://www.econlib.org/library/Enc/bios/Lucas.html
My comment: Optimal taxes and regulation, which are much less than many believe, will induce capital spending, raise productivity, reduce prices, raise wages, and increase output. It will free-up labor to expand the economy. Therefore, tax revenue is maximized (at less than 20% of a bigger GDP). Moreover, it can boost business sentiment and consumer optimism, along with generating a wealth effect.
Moreover, gradually raising the national minimum wage to $12 an hour will also increase capital spending and labor saving technology. However, income taxes will have to gradually become less progressive to maximize tax revenue.
“give the money back to the people”
Define “people”
Nice! George W. Bush had a definition – “his base”. Which of course meant the ultra-rich.
John Dikcerson interviewed Paul Ryan yesterday on CBS This Morning. Interesting exchange. When Ryan claimed that tax revenues have risen in the last year, Dickerson properly fired back that one has to account for inflation. Now Dickerson was too polite to note that Ryan was lying but Ryan was and to his credit Dickerson said the right technical things. How did Ryan respond? He basically become blunt and repeated this lie about higher tax revenues!
https://www.cbsnews.com/news/paul-ryan-worries-tribal-identity-politics-is-becoming-the-new-norm-for-both-sides/
Kudlow in the 1980’s lied a lot on behalf of some supply-side silliness. The reality was that the Reagan tax cuts lowered real tax revenues, which is why the deficit exploded. But Kudlow kept talking about the growth of nominal spending and argued that nominal tax revenues rose. We saw this kind of money illusion recently from CoRev whose argued that workers enjoy nominal wages increases even if they are completely offset by inflation.
The topic of this post is how Trump is advocating using monetary policy to increase inflation, which will of course increase nominal tax revenues even as real revenues fall. My Econospeak post noted how even the Treasury Secretary will repeat the Kudlow-like lie – nominal revenues rose! Even though in real terms they fell. Good to see that Sammy has fallen for this rather transparent dishonesty!
“PeakTrader
October 18, 2018 at 5:22 pm
For example. Robert Lucas has done studies on “supply side economics.” He states:
“…eliminating capital income taxation would increase the U.S. capital stock by about 35 percent.”
Peaky quotes something he does not understand as usual. This increase is not immediate – it is over the long-run. OK – 20 year years from now perhaps the capital stock would be 1.3 higher than it is today. Put this in a production function and maybe output eventually will be 1.08 times where it is today. The effect on output over the next few years – quite minor. And this is from a very generous estimate that leaves out the crowding out effect from higher interest rates that a Trump fiscal disaster will most likely bring.
But this is how supply-siders do it. Quote something out of context that misses all reality. And then pretend they are smarter than the rest of us. Snicker!
PeakTrader Therefore, tax revenue is maximized (at less than 20% of a bigger GDP).
More evidence that you just don’t get it. Setting aside the nonsense about tax cuts increasing capital spending and economic growth, which is irrelevant to the issue of whether or not supply side tax cuts can pay for themselves. Again, tax cuts can only “pay for themselves” if the current tax rates are to the right of the revenue maximizing rate. This is just a basic function of the math. If you can’t understand this, then you really need to return all of your so called “degrees” from your alma mater. You keep confusing the optimal tax rate WRT to GDP growth rate and the revenue maximizing rate. Those are two very different things and you keep conflating the two. The revenue maximizing rate is almost surely much higher than the optimal rate WRT to GDP growth, and since the only way tax cuts pay for themselves is if the current tax rate is higher than the revenue maximizing rate, it logically follows that tax cuts towards the optimal rate WRT to GDP growth do not and cannot pay for themselves. Seriously, this isn’t that difficult. It’s just a matter of thinking something through.
As to the Lucas quote, this is just another example of what I like to call the supply side belief in the doctrine of Immaculate Accumulation. They believe that tax cuts miraculously and immaculately get translated into capital investment. In this alternative reality a lump of new capital just miraculously appears as manna from heaven. These tax cuts never produce a deficit that might crowd out investment. This surge in capital investment never seems to require a cut in consumption spending that might drive down the flexible accelerator. No concerns about stranded capital. A blind assumption that all of this new capital is complementary to labor and is not a substitute. No need to pay any attention to the empirical evidence about what has actually happened to personal saving rates following these “supply side” tax cuts. New capital investment just accumulates immaculately without the stain of reality getting in the way.
2slugbaits, as usual, your simple explanations are wrong.
Since WWII, federal tax revenue has been less than 20% of GDP, whether marginal tax rates were high or low. To increase tax revenue, you need a bigger GDP. Increasing the capital stock and labor saving technology will result in faster long run growth. Changes in tax rates can smooth-out business cycles. Therefore, federal tax revenue will increase. Lucas has done studies on “supply side economics.” Improved technology rather than a larger capital stock also increases productivity. Excess government spending crowds out investment and economic growth. If we actually followed Keynesian economics of budget surpluses at full employment, many problems in the economy wouldn’t exist.
PeakTrader Your comment is completely irrelevant to the issue of the revenue maximizing tax rate. And I gave up counting the number of times you contradicted yourself. What a mess.
2slugbaits, there are no contradictions.
If you believe there is a contradiction, you never pointed it out.
I can’t respond to your statements when they’re nonsense.
I guess, you believe GDP has nothing to do with tax revenue.
PeakTrader
If you believe there is a contradiction, you never pointed it out.
I’ll leave it as a homework exercise. Try harder.
I guess, you believe GDP has nothing to do with tax revenue.
Again, that’s not the issue. The issue is whether or not supply side tax cuts pay for themselves, not whether or not tax cuts can raise GDP. Still confused??? See the difference???
peak trader appears to be the example of somebody who is just smart enough to be dangerous, but not smart enough to be intelligent. this is common, especially among those who acquired a graduate degree but never completed a phd. they were able to memorize about 3/4’s of the information given to them, but never completed their knowledge and synthesized it in a coherent way. hence they can repeat talking points (isolated facts in a textbook), and apply them incorrectly to “prove” their point, without acknowledging how silly they are in the big picture. peaktrader can make completely contradictory arguments in the course of a day to “prove” his point, and is simply unable to understand you cannot have both conditions at the same time. as i told you before peak, it is best to stay quiet and simply learn some economic lessons from 2slugs. you will be better off in the long run. please take this friendly advice.