White House called for $3T in spending &amp; $1T in tax hikes in initial draft infrastructure proposal

That is so insanely irresponsible it borders on the comical (better "comical" than "criminal" ... )
Welcome to clown world USA

This on the wake of the disastrous first press conference after 56 days. 56 days to prepare. The bar being so low yes "he made it" what an achievement.
A snooze fest, slow and tedious.
The real problem is that it was all contrived and scripted.
Soft ball questions with the written answers given to him before the presser.
Nothing on foreign policy (as predicted it's starting to heat up)
Check out Chris Wallace's (a staunch democrat) remarks:
https://thehill.com/homenews/media/5...talking-points

The reaction from the public:

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Some watched it but very few were interested: traction is negative.
Hilarious (and sad)

gat

Mar 30, 2021 8:26am

RossEdwards: When has government ever used increased taxes to pay down debt? lol And Clinton had 8 years of peace v Bush having 9-11 so no comparison.

Wouldchuck: Government is incapable of doing anything efficiently with politicians running it. Trump got so much of the wall built because he is a businessman. Same with that ice rink in NYC. California's high speed rail attempt has been a dismal failure. Texas windfarms a major fall recently, and mostly idle when I have seen them. Unless business is willing to put their money into a project, w/o much in the way of Fed guarantees, it isn't practical.

And re Social Security - it was a long term "solution" to a short term problem. The idea of privatizing sounds goods until people are hit with one of the stock market shocks. The concept is also for people to move their money to safer interest bearing instruments when older. How's this 0.25% working out if that had been the plan?

Major shifts, like big ships turning, have to be done slowly. We have a trillion unspent from the previous package, 1.9 from the latest one, and they want to add another 5 or whatever? You suggest 10 or 20? I see a lot of Solendras and Ca rail boondoggles.

Mar 29, 2021 5:15pm

rough maths at a glance,
also think about the size of a government ,let alone one with no real plan and lots of borrowed money in hand.

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Mar 29, 2021 10:13am

thats right simple math tells us how early/stupid the whole idea is

Mar 29, 2021 5:25pm

Interest rates head up ,because inflation is expected ,thats a problem for the big borrower.
The FED will have to step in sooner or later ,
that will be expensive in its own right.

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fxsport

Mar 29, 2021 12:54pm

Quoting Wouldchuk

Disliked

Sell 100 year Infrastructure Bonds, 7.2% interest, interest and principal ultimately paid with usage fees of the new, current, high tech infrastructure--high speed rail system, above ground/below ground (whatever) tube transport, flying taxis, green energy, solar on city building roof tops, etc. take ten years, raise 10T and use it in 50-50 public/private funded projects, thus a potential of 20T in new investments in infrastructure--knock down all the old bridges and put up the best of the best in the world...yada, yada, yada. I live in Texas, and...

Ignored

That's pretty funny stuff there - man are you a master of sarcasm and comedy...

Oh what's that ....you were serious???.....Oh well....it's still funny!

Mar 29, 2021 11:09am

Sell 100 year Infrastructure Bonds, 7.2% interest, interest and principal ultimately paid with usage fees of the new, current, high tech infrastructure--high speed rail system, above ground/below ground (whatever) tube transport, flying taxis, green energy, solar on city building roof tops, etc. take ten years, raise 10T and use it in 50-50 public/private funded projects, thus a potential of 20T in new investments in infrastructure--knock down all the old bridges and put up the best of the best in the world...yada, yada, yada.

I live in Texas, and know west Texas very well. The landowners fear solar as they think its intended to supplant oil--NEANDERTHAL THINKING--they know "cotton farming" and "oil pumping" they "lease" their land for these activities--do the same with solar, (lease the land) raise the windmills up enough to allow the farmers to continue faming below, we would not stop petroleum use or even coal use "cold turkey." Narrative (Which Needs to be Spoken and Repeated Over and Over Again): "Of course we will continue pumping oil and mining coal, AND use solar, etc. to start producing more electricity for all the new electrically powered infrastructure which will run on electricity." Why say that? Because it is the truth, it will allow us to shift the use of oil we refine into gasoline into higher-value chemicals instead of burning it up driving cars and trucks!

Conclusion: Get money, a lot of money, not just a few measly T's via taxation (taxation is the Old Paradigm, no better than MAGA)--use the markets!! Raise 10T government matched with 10T private investment and really make America great like "the promise of America" used to be.

Narrative Summary: "We are not going to kill any industries/jobs, just add what we need for the future, to provide Americans with top paying jobs, make America the "Shining City Again," colonize the Moon and go to Mars and the Stars?" Why not??

Mar 29, 2021 5:11pm

Quoting Wouldchuk

Disliked

{quote} Just tossing out a broad idea. I'm not the one to fine tune it and make it workable. However, I present the idea much like ending Social Security and letting people "invest in the markets." Instead of taxing US and doing the old 20th Century paradigm, do the new, instead of taxation, make it investment which eventually pays the investor back via "the markets."

Ignored

I'm with you on tax, but tax is defiantly too low in US with that debt load.
I see the idea ,it's basically what you been doing the last 10 Y, apart from the word infrastructure is thrown in to mask its the exact same thing .A failing idea ,stepped up over the last decade.
US has good infrastructure already we hardly talk installing railway links across America .

Mingary

Mar 31, 2021 11:30am — Edited

Quoting Mingary

Disliked

That is so insanely irresponsible it borders on the comical (better "comical" than "criminal" ... ) Welcome to clown world USA This on the wake of the disastrous first press conference after 56 days. 56 days to prepare. The bar being so low yes "he made it" what an achievement. A snooze fest, slow and tedious. The real problem is that it was all contrived and scripted. Soft ball questions with the written answers given to him before the presser. Nothing on foreign policy (as predicted it's starting to heat up) Check...

Ignored

Coincidence ? I must not be the only one who has noticed this..
"Protecting Biden from further embarrassment"
This was bound to happen ... It is no longer allowed to ctiticize Dear Leader and only after His first ever press conference!

https://www.rt.com/usa/519642-youtub...islikes-biden/

Hilarious.

ALThau

Mar 29, 2021 11:38am

Higher taxes never resulted in higher revenues, just the opposite if anything. This is just a play for electorate. But I think they are stupid enough to think MMT will work. Heading into interesting future.

ALThau

Mar 29, 2021 4:57pm

Quoting RossEdwards

Disliked

{quote} How about GROWTH:? Extract.. History shows that higher taxes are compatible with economic growth and job creation: job creation and GDP growth were significantly stronger following the Clinton tax increases than following the Bush tax cuts. Further, the Congressional Budget office (CBO) concludes that letting the Bush-era tax cuts expire on schedule strengthened long-term economic growth, on balance, if policymakers used the revenue saved to reduce deficits. In other words, any negative impact on economic growth from increasing taxes on...

Ignored

Hope you are not serious. You can spin stats any way you want to, especially when it fits your narrative. Especially during Obama’s rule.Written in 2012. There are some current brainiacs that justify MMT also. Good luck with that.

UKBanter

Mar 30, 2021 2:29pm

1)Reduce Government (as it is proven inefficient).
2) Balance the books.
That's all I ask and you get my vote.
US, UK, Europe. This globalised cut and paste policies don't seem to be going very well. Australia ,Japan....... Looking at the year on year debt increases. Suggests to me the various "eonomies" are pretty much out of control.

aquavox

Mar 31, 2021 3:06am

the USA no longer lives in a "free Market"
CB's and Government intervention preclude free market politics - the world over.
Unfortunately the current world paradigm revolves around the "useless words" of "Leftist , Rightist" , "Extremist" ( from all sides) globalist, patriot, centrist, and all the "isms".... and .."ist's" you care to think of. (or dream up)
The words are not useless or meaningless , rather ... they are the norm now and describe the modus operandi of the post MMT world.
Are ideologies the new quasi religions? the 'idols' of ideology?

Steamroller

Mar 30, 2021 10:13am

Quoting barkie

Disliked

{quote} I hear you but here's the thing, big spender Trump increased US government with nearly $10 Trillion dollars within 4 years after he said he would wipe out the debt completely before the elections. To put it in perspective for you, this is nearly half of US GDP, but I didn't hear you complaining back then, right ? So relax, let Joe spend a bit of money, he needs to clean up the mess that Trump created to save the country, it's a crisis. Trump the maniacal spender. {image}

Ignored

That chart shows that Trump spent at the same pace as Obama. In percentage terms Trump spent less.... if that chart is accurate.

Mar 29, 2021 11:45am

Quoting Wouldchuk

Disliked

Sell 100 year Infrastructure Bonds, 7.2% interest, interest and principal ultimately paid with usage fees of the new, current, high tech infrastructure--high speed rail system, above ground/below ground (whatever) tube transport, flying taxis, green energy, solar on city building roof tops, etc. take ten years, raise 10T and use it in 50-50 public/private funded projects, thus a potential of 20T in new investments in infrastructure--knock down all the old bridges and put up the best of the best in the world...yada, yada, yada. I live in Texas, and...

Ignored

20 trillion at 7% per year ? what's the cost

Apr 2, 2021 9:45am — Edited

Quoting Wouldchuk

Disliked

I gather your view is austerity until debts are paid and money is saved? Are you saying that we spend this century paying down the debt, then the following century saving up the money and then the following 100 years rebuilding the country? I know/admit, I don't have the abilities/insights to offer a viable "plan" but funds to invest will come from taxes, wealth confiscation or "investments" or some means in order to "fix" the present and/or "build" the future. Please do offer your view.

Ignored

heres your options on how to de leverage.
Also
Capping how much a government can spend or it's other independent arm

'central bank' can print is a good idea again.
{like the gold standard did}

Point of fact is no Fiat Currency has ever retuned from over 140% debt to GDP .

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Mar 31, 2021 8:41am

Quoting Wouldchuk

Disliked

My broad idea, assumes 50/50 government-private investment, thus citizens would be 50% stake holders (at least at startup). I admit I can't produce a "plan" (like E Warren, "plan for that," lol). Gut level, I think I am suggesting something that has merit for a "future" and all I really hear Uncle Joe talking about is something that would fit the era of 1960-80, taxes. Use of the markets... there has to be a way. In my view, "command Economies" globally will "clean our clock" this century if America...

Ignored

I'm thinking you struggle with the problem at hand,
The only thing in your broad idea is no more tax and split the risk somehow between government and private ,to borrow even more.It would pay for itself or put another way no one pays.
Its more like 'I Have A dream...'

Let's start with an idea that deals with immediate problems first ,when you realise the era you're pointing to as old fashioned, added up.

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Apr 2, 2021 9:41am — Edited

Quoting Wouldchuk

Disliked

I gather your view is austerity until debts are paid and money is saved? Are you saying that we spend this century paying down the debt, then the following century saving up the money and then the following 100 years rebuilding the country? I know/admit, I don't have the abilities/insights to offer a viable "plan" but funds to invest will come from taxes, wealth confiscation or "investments" or some means in order to "fix" the present and/or "build" the future. Please do offer your view.

Ignored

We had austerity in the uk ,people complained about it but our debt did drop .Uk debt is on the cusp of no high pain return.It's a good job the public rejected Jeremy Corbyn's vision of huge spending, sweets for everyone, prior to the virus.
One of the best ways is to reduce Government spending and as I said to you tax in the US is way too low.
Im not a high tax kinda of guy & agree theres a limit to raising the rate v revenue.
Half the problem in the US is very bad messaging from the top across many hero presidents.Like after the war people need to believe it's a just cause.

I can tell you for an actual fact with numbers in hand, your country will not grow by pumping that kind of money into it.
The way to actually tell what's happening is how much putting 30% brand new money in changes the GDP.
Effectively what will happen is Government will crowd out the private sector ,because a country only has so many resources.

In a nutshell as this deficit goes up, growth will go down, like in every other example on the planet that's ever experienced this situation.

How much of this 2 + trillion do you really think will be spent on essential infrastructure ?have a look at his proposed list

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RossEdwards

Mar 29, 2021 11:54am

Quoting ALThau

Disliked

Higher taxes never resulted in higher revenues, just the opposite if anything. This is just a play for electorate. But I think they are stupid enough to think MMT will work. Heading into interesting future.

Ignored

How about GROWTH:?
Extract.. History shows that higher taxes are compatible with economic growth and job creation: job creation and GDP growth were significantly stronger following the Clinton tax increases than following the Bush tax cuts. Further, the Congressional Budget office (CBO) concludes that letting the Bush-era tax cuts expire on schedule strengthened long-term economic growth, on balance, if policymakers used the revenue saved to reduce deficits. In other words, any negative impact on economic growth from increasing taxes on high-income people would be more than offset by the positive effects of using the resulting revenue gain to reduce the budget deficit. Tax increases can also be used to fund, or to forestall cuts in, productive public investments in areas that support growth such as public education, basic research, and infrastructure.
More here:
https://www.cbpp.org/research/recent...rm-the-economy

aquavox

Apr 1, 2021 10:14pm

taxing and higher taxing is not a viable way to repay debt.
at best it covers the interest, and you will note most OECD governments run on fiscal deficit funding i.e. they spend more than they earn ( in order to try and boost productivity)
to try and tax a country that is going to struggle for at least the next couple of years ( due to
Pandemic, inflation , low productivity etc..) is ridiculous because the taxable income base is just not there to start with.
my take on the huge debt saddle the US is trying to ride is that :-
they will not pay it back ( they cannot, do the math)
the debt will be inflated to kingdom come, ( existing M3/MZM in circulation will become worth less and less)
what is more likely is a new monetary base will be adopted / confiscation (Cyprus style "haircuts" )
saving does not boost the economy short term ( only long term if invested productively)
the only way to build the future is to Innovate, Invest in Productivity, and jump to the next Techno Singularity (which we have already started btw).

AnniLi

Mar 30, 2021 10:33pm

You get close when you describe both Republican and Democratic economic policies as being 'middle of the road' - the same economic objectives and instruments are used by both sides, making it really difficult to choose a Party on the basis of economic knowledge and textbook policy approaches. Milton Friedman who somewhat represented a 'right-wing' viewpoint would not recognise the path which the Republicans have taken as right-wing but rathr as opportunistic politics and not economics at all. Tea Party people equally have abandoned ship. Friedman believed in free markets where appropriate and argued that the correct measure of Government Revenues burden was Government Spending which were either paying for public services or for paying down debt, so debt management was included in the concept of achieving a fiscal balance.

Another enlightening concept is the idea of a cyclically adjusted budget balance. The balance should be in healthy surplus in good times allowing a neutralising mechanism for bad times being in fiscal deficit. But the last time USA was near balance was 20 odd years ago - 12 years of Republican and 8 Years of Democratic. Tough times, yes, but please don't debate that this record tells you anything at all about the cyclically adjusted balance - its a significant deficit plain and simple, and a long way from being fixed.

Instead of a useful debate on fiscal matters we get useless words and phrases such as 'radical left', 'radical socialism', 'the left', 'the far right, 'the extreme right' and so on which takes the debate nowhere in particular and you end up back facing the truth which is that Republican economics is a mystery, not just to non-Republicans but to everyone. But the ex-President (has he conceded yet) seems to be leading the war of words claining the election was rigged and his presidency was stolen from him. And he has tens of millions of followers.

Let's not pretend that the fiscal debate can be laid out these days in terms which a 101 student from the 1960s could understand. Its not about fiscal issues. Its about a political blocked drain which can't be fixed by using meaningless words. US democracy and economic policies remain weakened in the meantime.

Mar 29, 2021 12:50pm — Edited

You can't defer it by borrowing another 20T on 28T you already owe full stop and thats the attitude problem that seems to exist.
For a start do you really trust the government to spend 20T wisely to achieve any income from that spend before your country simply goes bust.

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Mar 29, 2021 4:50pm

Quoting Bones

Disliked

{quote} 20 trillion at 7% per year ? what's the cost

Ignored

Just tossing out a broad idea. I'm not the one to fine tune it and make it workable. However, I present the idea much like ending Social Security and letting people "invest in the markets." Instead of taxing US and doing the old 20th Century paradigm, do the new, instead of taxation, make it investment which eventually pays the investor back via "the markets."

Mar 29, 2021 4:53pm

Quoting fxsport

Disliked

{quote} That's pretty funny stuff there - man are you a master of sarcasm and comedy... Oh what's that ....you were serious???.....Oh well....it's still funny!

Ignored

Seriously, don't raise taxes, seriously do use "the markets."

Apr 1, 2021 9:35pm

I gather your view is austerity until debts are paid and money is saved? Are you saying that we spend this century paying down the debt, then the following century saving up the money and then the following 100 years rebuilding the country? I know/admit, I don't have the abilities/insights to offer a viable "plan" but funds to invest will come from taxes, wealth confiscation or "investments" or some means in order to "fix" the present and/or "build" the future. Please do offer your view.

Apr 1, 2021 10:04pm

Quoting AnniLi

Disliked

You get close when you describe both Republican and Democratic economic policies as being 'middle of the road' - the same economic objectives and instruments are used by both sides, making it really difficult to choose a Party on the basis of economic knowledge and textbook policy approaches. Milton Friedman who somewhat represented a 'right-wing' viewpoint would not recognise the path which the Republicans have taken as right-wing but rathr as opportunistic politics and not economics at all. Tea Party people equally have abandoned ship. Friedman...

Ignored

AnniLi, thank you for your comments, "politics" in our American times have been reduced to sarcastic school-yard nicknames and yay for our side boo for the other. I am gabberflasted that we arrive at 2021 when no politics address real issues or matters of substance, nearly half the nation follow and want for the return of a "president" most famous for promising everything, delivering nothing but adding $5T more debt and launched an attack on the Capitol and Congress of the United States presumably believing that the ceremonial report of voting in an election could be stopped, vote reports confiscated and election thereby overturned?? I still encounter (unfortunately members of my family) who still believe that Biden will be removed and Trump installed because he is the duly elected???

It seems America needs a way forward, Biden proffers the best that last century would offer and the Republicans are fixated on making sure the massive voter fraud which can't be found or substantiated never happens again? We live in truly "confusing" times leading to massive uncertainty in the midst of global pandemics and no clarity of which direction to go or even how to begin?

Twenty years ago, circa 2000, I myself surveyed what was happening, and came to the conclusion that the only way I could assure my future (as for income in retirement) was to learn to trade the markets--I did, and today grasp that my thinking and forethought has paid off--I am 68 years old and would live in poverty with only my monthly SS. I am not "rich" by any means, but have what I need because I learned "the markets."

Unless the individual investor is barred from trading, I can get by, more than get by and will pass on hard earned lessons to my grandchildren, my son is now a professor of finance, Ph.D. And as he says, I watched my dad trading online circa 1999 onward. On his own, he came to the conclusion the markets were the way to a more certain financial future.

When I have the opportunity, I advise any youth or young adult to get into "the markets."

Mar 29, 2021 2:06pm

Advocates of increased tax rarely mention upfront (maybe as a footnote or similar if they are pushed) the deadweight loss associated with increasing taxes.

Deadweight losses are a cost - they are anything "real" lost to economic activity. This includes work, savings, consumption, investment and the many other microeconomic things that are intuitive at some level. Everything is distorted.

Some may be surprised to learn that it is calculated that the real loss to the economy is the increase in the tax, squared. Welfare economists have notions of equity and fairness on their corner of the boxing ring.

barkie

Mar 30, 2021 4:07am

Quoting LloydOz

Disliked

{quote} Or infinitely better, decreasing spending.

Ignored

I hear you but here's the thing, big spender Trump increased US government with nearly $10 Trillion dollars within 4 years after he said he would wipe out the debt completely before the elections. To put it in perspective for you, this is nearly half of US GDP, but I didn't hear you complaining back then, right ?
So relax, let Joe spend a bit of money, he needs to clean up the mess that Trump created to save the country, it's a crisis.

Trump the maniacal spender.

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Mar 30, 2021 3:24am

Quoting Mingary

Disliked

The real problem is that it was all contrived and scripted.

Ignored

This was always going to be how things would be conducted with President Biden.

I don't think elaboration or clarifying this sad fact would be very kind.

{edit - that I framed that partly in the past tense was accidental?}

Mar 30, 2021 3:38am

Quoting fxsport

Disliked

{quote} Once you HAVE GOOD SUSTAINED GROWTH THEN you can discuss increasing taxes.

Ignored

Or infinitely better, decreasing spending.

Mar 30, 2021 4:13am

Quoting barkie

Disliked

{quote} I didn't hear you complaining back then, right ?

Ignored

This isn't about me, actually.

Mar 30, 2021 8:28pm