Return of the Tooth Fairies

(as referenced by Larry Summers, quoted in this post).

As I watched Secretary Mnuchin on Meet the Press (before discussing his taxpayer funded trip to view the recent eclipse) state :

…the president is not going to sign something that he believes is going to increase the deficit.

I was struck by an overwhelming sense of déjà vu. Of course, the caveat “he believes” is important. Mnuchin mentions “dynamic scoring”, but most economists agree that it is not plausible that the tax cuts as currently sketched out would lead to a revenue neutral outcome.

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The View from 2012: The Hiatus in Per Capita US GDP

If one was looking back at the data available a half a decade ago, an observer (not me) might have concluded that there was a hiatus in per capita output that signalled an end to growth.



Figure 1: GDP per capita in thousands of Chained 2005$, SAAR, as of September 28, 2012, calculated using GDP and population reported at that date. On log scale. Source: St. Louis Fed ALFRED, and author’s calculations.

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