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To Continue Economic Improvement
Old 09-17-2018, 12:45 PM   #1
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To Continue Economic Improvement

First, an overview of he current state of the economy, from the New Yorker.
How we got here:

https://www.newyorker.com/news/our-c...timulus-stupid

In my hopeful opinion what I'd like to see to make a continued improvement possible. From NBC:

https://www.nbc26.com/news/national/...e-who-will-pay

Am looking ahead about five years to see the economic boom that could take place.

Your thoughts?
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Old 09-17-2018, 01:04 PM   #2
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I don't think I understand your point.

You believe that if some sort of infrastructure spending bill gets passed it will lead to an economic boom five years down the road?

If so, does it matter how we pay for the infrastructure plan?

My 5-year crystal ball always seems to say "Reply hazy. Try again."
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Old 09-17-2018, 01:56 PM   #3
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"The purpose of economic forecasting is to make astrology look respectable." often attributed to John Kenneth Galbraith, but actually said by Ezra Solomon, professor of economics at Stanford University and a member of the Council of Economic Advisors during the Nixon administration.


I'd encourage you to read "the signal and the noise" by Nate Silver or at least the chapter on economic forecasting.
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Old 09-23-2018, 07:17 AM   #4
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I can hope that I'm wrong, but my expectation is that this ends badly.

Quote:
For every dollar added to the budget deficit, the Treasury has to sell another dollar of Treasury bonds.
...
The C.B.O. sees trillion-dollar deficits stretching into the indefinite future. Wall Street analysts reckon that by the end of 2019 the monthly issuance of Treasury bonds will have roughly doubled since the beginning of the Trump Administration.
....
Torsten Slok, the chief international economist at Deutsche Bank, told me that he is already hearing concerns about sustainability from purchasers of Treasury bonds, particularly overseas buyers, such as insurance companies, pension funds, and sovereign-wealth funds. “The fact that I am getting these types of questions is revealing that people are getting worried about the U.S. fiscal situation,”
Congress passes a huge stimulus package when the economy isn't in a recession.

It has to be financed with borrowing. That makes it harder for private businesses to borrow. And, sooner or later, lenders decide that the US gov't isn't the best place to put money.

The stimulus temporarily pumps up the economy. I don't know how long "temporary" is. But, I'm sure it's not infinite. IMO, in the long run, we'd be better off with a gov't that runs a balanced budget when the economy is in good shape.

The infrastructure plan never got off the ground. Getting private money to pay for roads and bridges means making them toll roads and toll bridges. And, giving the private companies guarantees that the gov't won't build competing, free roads and bridges. Getting public money means even more borrowing or more taxes.
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Old 09-23-2018, 08:02 AM   #5
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Quote:
Originally Posted by Independent View Post
I can hope that I'm wrong, but my expectation is that this ends badly.

Congress passes a huge stimulus package when the economy isn't in a recession.

It has to be financed with borrowing. That makes it harder for private businesses to borrow. And, sooner or later, lenders decide that the US gov't isn't the best place to put money.

The stimulus temporarily pumps up the economy. I don't know how long "temporary" is. But, I'm sure it's not infinite. IMO, in the long run, we'd be better off with a gov't that runs a balanced budget when the economy is in good shape.

The infrastructure plan never got off the ground. Getting private money to pay for roads and bridges means making them toll roads and toll bridges. And, giving the private companies guarantees that the gov't won't build competing, free roads and bridges. Getting public money means even more borrowing or more taxes.
I agree on the balanced budget. The question is how much more will you pay in taxes, or what current benefits would you give up. It will likely require both taxes and benefit cuts. What politician is going to vote for that?
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Old 09-24-2018, 01:58 PM   #6
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I agree on the balanced budget. The question is how much more will you pay in taxes, or what current benefits would you give up. It will likely require both taxes and benefit cuts. What politician is going to vote for that?
True.

(assuming the "you" meant "voters in general", I think I'd be willing to do a balanced budget which would include me giving up stuff)
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Old 10-07-2018, 05:26 AM   #7
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Considering the current deficit is approaching $1T, there’s a fair amount of tax raising and benefit cutting required to “balance the budget”.

The good ol’ US of A is alarmingly inept at long-term planning, but it seems to me that a gradual weening would be less disruptive. Of course, we don’t appear to be in danger of doing either...
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Old 10-16-2018, 07:16 PM   #8
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This would be great for the economy, but hard to fund. We know that we're very much behind in infrastructure maintenance and spending. My concern is not so much how to pay for this, but how to prioritize the work, and ensure that the most needed projects are finished first. During the prior "shovel ready" projects phase, here in Hawaii, we did really stupid, and uneeded projects like replacing existing and functional guard rails, installing pavers (bricks) under overpasses that never had them before, and reinforcing H1 freeway pavement that was in good condition and showed no signs of failure. We spent a lot of money, created quite a few jobs, but these provided little benefit to Hawaii. At the same time, some of our coastal roads are failing due to erosion, bridges over 100 years old are needing to be repaired, etc. I'm not sure about this country's ability to prioritize based on engineering studies that quantify real need and reduce the liklihood of catastrauphic failure.
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