Biden's Economy?

[Doctor Steuss]

It should say something about how bad the economy generally is that 3% year over year inflation is perceived now as such a victory. That's not even counting the fact that groceries and other essentials never seem to come back down once they go up.

So, inflation is caused by a bad economy?

Well, that'd explain why Trump's fed chair wanted to indirectly cause job losses in order to reduce inflation. Or not.

I'm sorry Ajax. I've been incredibly snippy and dismissive lately in conversing with you. A little snarky banter here and there is all good, but I'm not particularly proud of my growing trend of treating you like this.

One of the things the fed's actions with interest rates is meant to do is (and this is the term you'll hear some economists use in interviews) "pump the breaks" on the economy. There are a lot of things that contribute to inflation. We are in a somewhat unique situation this go-around, in that there is a significant amount that's coming from supply chain issues (global), and corporate greed. We can't exactly "pump the breaks" to make manufacturing issues disappear -- and it does nothing to address companies increasing their margins because... well... they can. Even hippy-dippy leftist companies like Ben and Jerry's have done it. There was a thing a while back where they announced they were increasing their prices in anticipation of inflationary cost increases. Not because their costs had increased, but because the "anticipated" they would. Now, I imagine they likely actually did, but it's an example of companies taking advantage of inflation to increase margins (even if temporarily).

Right now, the unemployment rate is 3.6%. It's been under 4% for over a year. Earlier this year, the unemployment rate was the lowest it had been in 50 years (!!!).

When Trump left office, the GDP per capita was of the US was 63,528.60. Right now, it's 76,398.60.

Breaking it down a bit further, and into percentages: During Trump's presidency, the GDP per capita increased about 6% over 4 years. We're only half-way through Biden's presidency, and GDP per capita has increased over 20% (!!!). Even if we try to adjust that with inflation, it's still an insane jump in such a short amount of time.

The economy is kind of off the rails. It just doesn't seem like it to most people (myself included) because most of the massive increases in economic growth isn't being felt evenly.

[Doctor Steuss]

Yup, it's going to suck for future generations when the bill finally comes due. The current burden for each taxpayer is $253,005

That's what they said 40 years ago when Reagan crossed us over the $1 trillion debt milestone. I was my grandfather's grandson at the time and yet I'm now 53, and don't ever remember having to write out a huge check to the government to pay for my share of the debt.

So when is this infamous and elusive "due date" supposed to come?


(hint: never)

It will come due when the US dollar loses its position as a global reserve currency, and/or when the US's credit rating drops to a point that it's no longer able to borrow money at a sufficient rate to at least cover the interest payments and keep the current trend going, necessitating the US start paying down the debt.

I'm not so confident to believe that day will never come. Especially when the debt ceiling is predictably becoming a political cudgel for Republicans. The "due date" can only be pushed so long as the US is able to borrow.

[Doctor Steuss]

Right now, the unemployment rate is 3.6%. It's been under 4% for over a year. Earlier this year, the unemployment rate was the lowest it had been in 50 years (!!!).

Wanted to add something to this, since I didn't really explain why the unemployment rate was relevant, and figure it might warrant a new post in lieu of an edit.

In economics, there's a theory/concept called the "Phillips Curve." Essentially, the greater the economic growth, the lower unemployment will be, but also the higher inflation will be. It's not an infallible theory (rascally stagflation), but it's a partial explanation for what's going on now.

[Res Ipsa]

Right now, the unemployment rate is 3.6%. It's been under 4% for over a year. Earlier this year, the unemployment rate was the lowest it had been in 50 years (!!!).

Wanted to add something to this, since I didn't really explain why the unemployment rate was relevant, and figure it might warrant a new post in lieu of an edit.

In economics, there's a theory/concept called the "Phillips Curve." Essentially, the greater the economic growth, the lower unemployment will be, but also the higher inflation will be. It's not an infallible theory (rascally stagflation), but it's a partial explanation for what's going on now.

Good summary. The Phillips curve is what led to what we popularly recall the “natural rate of inflation.” That rate can change due to many factors, including subjective expectations. Regardless of the specific rate at any time, the theory is that we cannot reduce unemployment below a certain level without creating significant inflation. I’ve seen lots of attempts to estimate it, with 4% being the lowest I recall.

Marx would describe this need to have some rate of unemployment in a capitalist system as “The reserve army of the unemployed.”

[Doctor Steuss]

Marc would describe this need to have some rate of unemployment in a capitalist system as “The reserve army of the unemployed.”

So... I thought you meant Marc Levinson in the above. I've listened to (and read) a decent amount of his stuff because of how accessible it is to a layperson like me, so I was racking my brain and kicking myself for the fact that this didn't seem familiar at all to me. Finally, I hit ole Google and...

Now, here we are with a self-admission (and realization) to how utterly inept and unfamiliar I am with Marx. Lol.

I learned something new today, which makes it a very good day. Thank you.

[Res Ipsa]

Marc would describe this need to have some rate of unemployment in a capitalist system as “The reserve army of the unemployed.”

So... I thought you meant Marc Levinson in the above. I've listened to (and read) a decent amount of his stuff because of how accessible it is to a layperson like me, so I was racking my brain and kicking myself for the fact that this didn't seem familiar at all to me. Finally, I hit ole Google and...

Now, here we are with a self-admission (and realization) to how utterly inept and unfamiliar I am with Marx. Lol.

I learned something new today, which makes it a very good day. Thank you.

My spell checker really didn’t want to let me say “Marx” I think it snuck off to the Turning Point USA conference over the weekend.

I know Marxian economics, but know next to nothing about Marxian anything else. He wrote lots of stuff on lots of topics.

[ajax18]

I hope you enjoy paying the $31 trillion debt.

Yup, it's going to suck for future generations when the bill finally comes due. The current burden for each taxpayer is $253,005 (US Debt Clock). Bush increased it by 57% in eight years. Obama increased it by 58% in eight years. Trump, wanting to be the best at socialism, increased it by 33% in only 4 years. Before them, Clinton reduced it by 1%, Bush Sr. increased it by 36%, and Reagan, the greatest socialist marxist communist of them all, increased it by 142%.

Deficit by FY:

FY 2021: $966 billion budgeted WITHOUT pandemic spending
FY 2020: $1.083 trillion budgeted WITHOUT pandemic spending
FY 2019: $984 billion
FY 2018: $779 billion (Trump, and the Republican majority's first budget -- more socialist than the last 5 years of Barack HUSSEIN Obama)
FY 2017: $665 billion. (This was Obama's last budget, which Trump asked to revise to spend even more... because he's a Marxist socialist. Congress said no.)
FY 2016: $585 billion
FY 2015: $442 billion
FY 2014: $485 billion
FY 2013: $680 billion

Link

Your numbers against Trump only have meaning in that the left and namely Fauci was able to bamboozle him into scamdemic spending. Your scamdemic brought more debt upon future generations than they will ever be able to pay. I don't comprehend a projected $51 trillion debt in under ten years. But one thing I do know is that it will never be paid off by any future generation. We are permanent debtors. One thing about the debt. It always gets bigger. It never gets smaller.

[Res Ipsa]

Special pleading aside, I think it's helpful to look at a statistic that economists use to evaluate the national debt: National Debt as a percentage of GDP.



This graph shows whether the value of goods and service we produce is increasing faster or slower than the national debt. When the trend is up, the debt is increasing faster. When the trend is down, the debt is increasing slower.

You can see several different points at which there are changes in the trend. From 1966 (the first year of the graph), the debt is growing slower than the value of what we produce. That changes in 1981, with the start of the Regan Revolution. The tax cuts that were supposed to spur growth under Supply Side Economics actually resulted in the National Debt growing faster than the economy.

The next change in happens during Bill Clinton's two presidential terms, which included one balanced budget. The upward trend resumes after Clinton's term ends.

Then comes the 2008 crisis, which caused a sharp upward spike, followed by a continual reduction of the rate of increase during Obama's term of office. There is some bouncing around, but I think the Obama years and Trump's first two years roughly fit a pretty smooth curve.

Then comes the pandemic. It was a world-wide event that was going to hurt the U.S. Economy no matter what was done. With the exponential rates at which cases, hospitalizations, and deaths were increasing in the states that were first hit with the pandemic, the health care system in those locations were at the brink of collapse and letting the virus simply run free would have caused so much illness and death in a short period of time, that the economies would have been severely damaged or destroyed for some period of time.

The federal government did the right thing in 2020 by pumping money into the economy to keep it afloat. With 20-20 hindsight, we can criticize how it was done. but it was the right thing, as it helped the economy recover extremely quickly from the shock of the pandemic. And you can see that, since the initial shock, the economy has been growing faster than the deficit.

Now, I've tracked the changes in trends by presidential terms, but the fact is that it is Congress that appropriates money for spending and determines tax rates. Presidents cannot cut taxes, although they can sign a bill that cuts taxes. Regan's election started a revolution in terms of cutting taxes that resulted in the National Debt increasing faster than the economy. But Reagan could not have done so without Congress.

The two events that caused significant shocks to the economy were nothing that a President alone could address or avoid. And that should be the real lesson. Presidents have little more than the bully pulpit when it comes to taxes and spending. So, while presidential terms are convenient markers for looking back, their use really overstates their actual impact on the economy.

[Doctor Steuss]

Your numbers against Trump only have meaning in that the left and namely Fauci was able to bamboozle him into scamdemic spending. Your scamdemic brought more debt upon future generations than they will ever be able to pay. I don't comprehend a projected $51 trillion debt in under ten years. But one thing I do know is that it will never be paid off by any future generation. We are permanent debtors. One thing about the debt. It always gets bigger. It never gets smaller.

I really wish you'd read stuff before commenting. It's incredibly frustrating.

Other than the percentage increase, my numbers included exactly zero pandemic spending. I purposefully left out the pandemic spending. That's why I wrote "WITHOUT pandemic spending" by the years of pandemic budgets. Also, I imagine there might be some weird new conspiracies involving Doc Brown and a DeLorean, but the pandemic wasn't happening in FY 2018 and 2019, when Trump and his Republican majority started their foray into being more socialist than Barack HUSSEIN Obama. He literally didn't even wait for his own budgets before trying to be the biggest welfare queen socialist ever -- he tried (and failed) to increase one of Obama's budgets.

[ajax18]

Your numbers against Trump only have meaning in that the left and namely Fauci was able to bamboozle him into scamdemic spending. Your scamdemic brought more debt upon future generations than they will ever be able to pay. I don't comprehend a projected $51 trillion debt in under ten years. But one thing I do know is that it will never be paid off by any future generation. We are permanent debtors. One thing about the debt. It always gets bigger. It never gets smaller.

I really wish you'd read stuff before commenting. It's incredibly frustrating.

Other than the percentage increase, my numbers included exactly zero pandemic spending. I purposefully left out the pandemic spending. That's why I wrote "WITHOUT pandemic spending" by the years of pandemic budgets. Also, I imagine there might be some weird new conspiracies involving Doc Brown and a DeLorean, but the pandemic wasn't happening in FY 2018 and 2019, when Trump and his Republican majority started their foray into being more socialist than Barack HUSSEIN Obama. He literally didn't even wait for his own budgets before trying to be the biggest welfare queen socialist ever -- he tried (and failed) to increase one of Obama's budgets.

You're right I didn't read everything. I'm running out of time in between patients lately due to a very busy office which helps given my own out of control spending. I'm honestly happy to see some economic improvement and get the feeling people are finally going back to work. I fear the next shutdown will be done in the name of climate change. And though my heart says I'd like to see the 90s and Clinton again my head says we're about to take gut punch.