A Peaceful, Easy and Just Prescription for Growth

How fast will the economy grow under Trump? It depends on who you ask.

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Andrey Popov/Dreamstime.com

Will the economy grow at 3 percent and sustain this rate over 10 years? That's the question on everyone's mind. In the swamp, answers to that question can often be predicted based on one's political affiliation.

The original claim comes from the Trump budget released a few weeks ago. On the pro side, we have Kevin Hassett, chairman of the White House Council of Economic Advisers (CEA). He makes a serious case that under President Donald Trump's policies, 3 percent annual real growth could be a floor. On the con side, you have a former chairman of the CEA under President Barack Obama saying that the economic forecast in the budget is the most absurd he's ever seen.

Predicting what growth will look like beyond the next year is ambitiously hazardous. But people try nonetheless because the stakes are very high. Indeed, the payoff of the economy's successfully delivering higher and sustained growth is huge. Though everyone most likely gains from growth, this payoff is mostly felt in the lower half of the income distribution and helps lift people out of poverty.

In the United States, the difference between a real growth rate of 2 percent and a rate of 3 percent is the difference between doubling real per capita income in 35 years and doubling it in 23.5 years. If the administration's forecasts were to materialize, the economy would be $28 trillion bigger in 2028 than currently projected. That's a lot of wealth.

A 3 percent real growth rate would be a sharp contrast if sustained over 10 years. Back in March 2017 (the most recent time the data were made available), the Congressional Budget Office projected 1.8 percent growth over 10 years. Many Americans can still remember the 1990s, when the economy grew at 3.3 percent on average, but they know they haven't experienced that level of prosperity in almost two decades.

The good news is that we know what helps generate higher growth. Academic research has shown that nations that follow Adam Smith's prescription of "peace, easy taxes, and a tolerable administration of justice" enjoy higher growth rates. They also enjoy higher levels of entrepreneurship and innovation and, most importantly, lower poverty rates than countries with less economic freedom.

That's why the Trump administration believes that this economy has the potential to deliver higher growth than in the past. The massive tax reform bill recently passed included undeniably pro-growth reform for the corporate income tax. The change is already triggering larger capital investment, which will fuel higher productivity and growth. But can this be sustained over 10 straight years? Even in an ideal scenario, that's questionable.

Yet we've also seen serious deregulation, which is cause for optimism. And the administration seems committed to removing anti-growth barriers erected in the past, such as occupational licensing schemes and net neutrality regulation.

Unfortunately, Republicans are once again on a spending spree. Even budget assumptions can't hide the trillion-dollar deficits this year and next. That's not good. Economists at the Europe Central Bank, for instance, looked at 108 countries between 1970 and 2008 and found that "government consumption is consistently detrimental to output growth irrespective of the country sample considered." Though our financial problems didn't start under Trump, making them worse can only get in the way of the positive growth triggered by tax reform and deregulation.

It's also disheartening to see the president threatening to implement steel tariffs, withdraw from NAFTA and restrict legal and illegal immigration. Researchers predict that withdrawing from NAFTA could cost us $50 billion annually. When the Bush administration implemented steel tariffs in 2002, steel-consuming industries lost 200,000 jobs as a result of higher prices. That's more workers than there were in the entire steel industry.

Meanwhile, in 2016, American Action Forum scholars estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years. That would amount to $1.6 trillion in lost wages, spending and other economic activity.

So, are we going to see 3 percent growth sustained over 10 years? Considering the current and growing size of our federal government, it will be hard unless a mind-blowing innovation comes along as the internet did in the 1990s. It would require that Trump officials be as hands-off as the Clinton administration was back then and not shoot the economy in the foot with idiotic price-raising protectionist policies.

NEXT: Thoughts on the New Constitutional Case Against Obamacare

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  1. Almost the entire federal scheme for determining growth, deficits, and debt is a joke consisting of magic and wishful thinking.

    3% of growth would be a drop in the bucket, if government would be cut by 50% and Americans could focus on domestic growth rather than when the next civil war is going to kick off.

  2. “Meanwhile, in 2016, American Action Forum scholars estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years. That would amount to $1.6 trillion in lost wages, spending and other economic activity.”

    American Action Forum lists Laura Collins: Immigration Expert. Laura Collins is an immigration expert.
    TOP WOMEN

    Someday these “experts” will just admit that they don’t know as much as they portray they do.

    1. You are much more optimistic than I am.

      Of course, you discount the possibility that they are purposefully lying. This seems to me to be far more likely.

  3. ” Academic research has shown that nations that follow Adam Smith’s prescription of “peace, easy taxes, and a tolerable administration of justice” enjoy higher growth rates. ”

    This is rather like saying that academic research has shown that people who exercise regularly and watch their diet enjoy better health. It’s true, but no fun.

    The problem is that economic policy isn’t crafted for the benefit of the general population. It’s crafted for the benefit of the people crafting it.

    When countries are poor, it’s in the interest of the governing elite that the nation becomes more prosperous, because you can’t rob somebody blind if they don’t have anything to steal.

    But once the nation achieves enough prosperity that the governing elite can be fat and happy, they cease to support growth oriented policies, because they’ve got theirs, and prefer to take further gains in terms of power, not money.

    1. When countries are poor, it’s in the interest of the governing elite that the nation becomes more prosperous, because you can’t rob somebody blind if they don’t have anything to steal.

      That’s not necessarily true. Power is an end, not a means. As long as the governing elite have absolute power, they don’t give a shit if the rest of the country starves to death. Zimbabwe, North Korea, Venezuela…

    2. It’s rare that a person would shout their economic ignorance so boldly–as if it were a strength.

      The sad truth is that you think it IS a strength.

  4. Pushing piles of money, credit markers and future obligations around on a desk does not a fiscal policy make.

    The books are so cooked that the meat falls off the bone.

    1. Agree with what you say except there are no piles of cash to move around unlike gold reserves.

  5. “Meanwhile, in 2016, American Action Forum scholars estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years.”

    It would also shrink the population by a comparable percentage. Net result in terms of per capita wealth, zero.

    1. “Meanwhile, in 2016, American Action Forum scholars” ( purveyors of fraudulent studies and manipulated statistics) “estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years.”

      With as much as 20% of the population desiring to work but “not participating in the work force” due to long term employment, I find this claim to be absurd on it’s face.

      And removal of illegal immigrants would likely reduce projected population over 20 years much more than 6 percent based on family size of illegal immigrants compared to national averages.

      And for that matter, the legal immigrants via the lottery system have low labor participation rates (less that 50%) that persist into the second generation. It may be good for THEM to come here, and it may be the “right” thing to do bringing them here, but is primarily a burden on federal and state budgets and a drag on the economy.

      1. Just pointing out that, even if you take their projection as accurate, it doesn’t mean what they want you to think it means.

    2. They don’t take the US debt with them so the per capita cost of financing the deficit grows.

  6. There is a point to be made that the policies over the previous 8, perhaps more years, generated significant surplus capacity in the economy that was masked in the statistics. For example, the unemployment rate remained high for so long in the face of long term unemployed losing unemployment benefits and disappearing from the statistics.

    It will take sustained growth to pull those people back into the work force since employers always prefer to hire from the existing working pool. It does however, represent a significant resource pool and unused economic capacity. The process of pulling them into the work force will also reduce federal and state expenditures.

    1. Many people who dropped out of the workforce built lives based on things other than money. Employers who are willing to hire someone 1 or 2 days a week could bring those workers back into the workforce.

      Low pay could be a factor. The Dallas Federal Reserve reports that the labor force participation rate is 3 percentage points lower than it was before the Great Recession and suggested that the missing workers are college degree holding prime age workers in wealthy households and high school degree holders close to retirement age. In other words, people who can easily choose to work or not are staying out of the workforce.

  7. “Economists at the Europe Central Bank, for instance, looked at 108 countries between 1970 and 2008 and found that “government consumption is consistently detrimental to output growth irrespective of the country sample considered.””

    EU governments to ECB: ‘Up yours!’

    1. There is no question that that is true. But government consumption is not the same thing as deficit. Government consumption is how much you are spending. Deficit is how much that exceeds your revenues. You can argue about the effects of tax cuts on revenue, but I don’t see spending getting that much larger than it already is. Yes, that is way too high.But it is also a level that the economy has adjusted to. So I think spending is more of a wash. We could do better if they would cut spending. But that doesn’t mean that we still can’t do a lot better than we are because of other actions like cutting regulations and taxes even if we don’t cut spending.

    2. You mean that government, which produces nothing of value, has a negative effect on the economy the more it consumes?

      I…. I’m shocked! I don’t know what to say!

  8. It’s hard to see how the economy’s going to grow as the Baby Boomers continue to retire from productive work and go into the demanding-free-shit industry.

    1. The millenials are just that good coming from their parents’ basements.

    2. Oh, but an abundant labor supply is a BAD thing because it drives down wages!!! (Illegal humans drive wages down double-plus, so THAT is double-plus BAD!!!)

      It is GOOD that us old geezers are retiring!!! EVERYONE should retire, and then things would be PERFECT!!!!

      1. Conventional wisdom says that the baby boomers were good for the economy as kids, because they created demand without adding to the labor pool. The fact that their parents chose what to buy and paid for it by earning money could make a difference. As retirees, baby boomers choose what to buy and tax prime age workers to pay for it.

  9. When the Bush administration implemented steel tariffs in 2002, steel-consuming industries lost 200,000 jobs as a result of higher prices.

    There is no citation for that figure and I cannot find anywhere on the internet that makes that claim. The only estimiate i can find is

    Manufacturers that depend on cheap steel for their supply chains get hurt. When all was said and done, the Institute for International Economics (IIE) estimated that as many as 26,000 jobs were lost in steel-using industries (like the auto industry, for example).

    http://www.businessinsider.com…..act-2017-7

    Note, that is from a reputable source but is only an estimate and has the qualifier of “as many as” and is only 26,000 jobs. Not that that is good, but it isn’t 200,000 jobs. That is very sloppy bordering on dishonest work by DeRugy here. She should not make such a claim without a citation and seems to have grossly overestimated the real number.

    1. Newark will soon have a large building made from wood. This new type of processed wood is getting more popular than steel and concrete in some settings. Environmentalists have decided that we can stop global warming by growing trees, cutting them down, and sequestering their carbon in buildings. The circle is complete.

  10. Meanwhile, in 2016, American Action Forum scholars estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years.”

    And I estimate that Hope Hicks is going to show up at my door and demand I have sex with her sometime this weekend. We all have our hopes and dreams about the future.

    That statistic is absurd on its face. The size of the economy depends on about a thousand things in addition to the number of people in it. And markets do this thing called adjusting. DeRugy is supposed to be an economist. There is no way anyone with even a rudimentary knowledge of macroeconomics would not be skeptical of that claim or be willing to site it as gospel truth without further explanation.

    1. The statistic is absurd only if you subscribe to a host of economic fallacies, as most nativists do.

      It is absurd if you believe that there are a fixed number of jobs, and that illegals “steal jobs” rather than producing value.

      It is absurd if you ignore all the businesses that immigrants create.

      It is absurd if you ignore the fact that immigrants create new markets with new demands.

      Yes, you’re right. It is completely absurd. Given your absurd assumptions.

      1. No it is absurd because removing people from the economy does not have a linear relationship with growth. This is especially true when you have public goods like schools and welfare and publicly funded healthcare that people consume. In such an economy, which we are one, not everyone is a net producer. Not everyone is a net producer in any economy. Kids don’t produce the same amount of resources they consume. Neither do old people or people who are in jail or not working or engaging in criminal activity or are sick.

        Second, even if they are not such people, removing them from the labor force only reduces productivity to the extent they cannot be replaced by the existing unused labor pool or by investment in capital. If people leave and are replaced by more efficient machines or by people who were already here but not working and part of the labor force, their leaving has no effect on total output. So it is a lot more complex than DeRugy claims it is.

        1. Opportunity cost is probably impossible to quantify, but that doesn’t mean it isn’t real. The seen and the unseen. You are hung up on what is seen, while ignoring the unseen.

          1. Yes it is impossible to quantify but opportunity cost goes both ways in a decision. Keeping these people comes at the opportunity cost of all of the various investments in capital that would be made in order to replace them. There is no clear answer which is greater. But at some point, an economy that continually relies on an endless supply of cheap labor and invests in capital less because in the short term there is no economic reason to will be poorer for it.

            1. But at some point, an economy that continually relies on an endless supply of cheap labor and invests in capital less because in the short term there is no economic reason to will be poorer for it.

              I’m not sure what you mean. There will always be a demand for cheap labor. Well, until it is outlawed by minimum wage laws. But not everyone has capital to invest.

              Contrary to what the talking heads on AM radio say, manufacturing output has never been higher. And that is a direct result of capital investment.

              But there will always be a need for cheap labor. Some things just can’t be automated, or at least not economically.

              1. “Need” is a relative term. Plenty of buildings in Manhattan have people who open doors for people professionally. Plenty of restaurants throughout America have people who make a living taking food from the counter to the table while the customers sit still waiting for their food. We could survive with less cheap labor.

          2. You are hung up on what is seen, while ignoring the unseen.

            You go off on an anti-nativist screed in response to John’s comment that the statistic is absurd, that you agree with, and *then* attempt to claim the objective high ground?

            This is a comment John, myself, and others consistently make about these sorts of ‘jobs to GDP’ estimations across a number of issues and is based in the libertarian and illegal immigration precepts that you cling to. The government telling a job to go away doesn’t make that job go away.

            1. Sit down and shut up. The adults are talking.

          3. If I spend 2 hours a week mowing my own lawn instead of watching TV, what is the impact on the economy?

            -$35/week?

            +$500 for a new lawn mower?

            Lower health care spend? Greater ER spend?

            1. Great example, Bubba Jones.

      2. Do illegals produce value at a higher rate than Americans re-entering the work-force? Doubtful, considering the education gap and the obvious twofer.

        I get kind of irritated by the people who are like, “this is good, so you can never have too much of it”. Even water will kill you in sufficient quantities. Sure, immigration is good a lot of the time, but it may not be the prescription for this economy.

        1. I think it is obvious that illegals produce value at a higher rate. That is why they are hired.

          1. I think it is obvious that illegals produce value at a higher rate. That is why they are hired.

            From my experience working in restaurants, anyone who says “Lazy Mexican” has never worked with any Mexicans.

          2. They’re hired because they’re cheaper.

            Sometimes a LOT cheaper.

            1. And they cannot complain about the boss sexually harassing them or breaking other labor laws.

      3. Illegal immigrants create businesses?

        1. The ones that create businesses are given visas.

      4. It is absurd if you ignore all the businesses that immigrants create.

        Conveniently, those people put a number on it: $1.6 trillion. The average American generates about $1.1M of economic activity over the same time, so the 10 million illegals should generate about $17 trillion in economic activity over 20 years, otherwise they are dragging down our economy and hurting growth.

        The very statistic in the article proves that keeping illegals in the country is a lousy deal for Americans and makes Americans worse off.

  11. Note the title…
    “A Peaceful, Easy and Just Prescription for Growth”

    Does that mean that every time I want to “consume” to grow the economy (buy something), or do some work (produce something) to grow the economy, that I have to get a friggin’ PRESCRIPTION for my friggin’ DOCTOR?!?!?

    I had thought it was bad enough, with me needing a prescription to buy a cheap plastic flute… Search for “lung flute” at http://www.churchofsqrls.com/ for details…

    DO NOT DO THIS, IT MIGHT BE ILLEGAL!!! But please note that I have added a new page, to tell you the details about how you should NOT make a homemade lung flute for yourself, at http://www.churchofsqrls.com/DONT_DO_THIS/

    1. You can buy lung flutes on Amazon.

      1. That’s correct… The older original ones are from “Medical Acoustics” and STILL require a prescription, but there’s newer ones now, called something different, that no longer require a prescription. Or you can risk the Wrath of Government Almighty, violate a patent (or 10 or 50 patents, who knows) and build one for yourself! For next to nothing! DON’T DO THAT!!! YE BE HEREBY WARNED!!!!

        All that and more is covered at http://www.churchofsqrls.com/DONT_DO_THIS/

  12. Regulations and tax cuts are pro growth. New gas tax being proposed tariffs just announced are anti growth. Big increases in government spending juice GDP in short term but anti-growth long term. The question is how much will republicans damage their own supposedly pro-growth agenda?

    1. Yeah, Trump isn’t pro-growth. Ending taxes and regulations are wonderful, but the anti-growth agenda of his Presidency has piled up to the level of catastrophic. He’s on his way to spend more then Obama in spite of a boom economy bringing in more tax revenue, while at the same time doing nothing to encourage, and in fact acting to discourage, attempts to reign in the debt. Furthermore, it cannot be overstated how catastrophically stupid the tariffs are.

      The tariffs are bad, bad, bad. They’re really bad for growth, and even more progressive economists think they’re bad, not to mention Friedman and other, actually talented economists. Tariffs are not good.

      1. If you think a few tariffs on steell or a continuation of deficit spending that has been going on for several decades counts as “near catastrophic”, you don’t know a damn thing about this subject.

      2. The tariffs are bad, bad, bad.

        If the tariffs allow people to come off government programs (EITC, welfare, etc.), they are not necessarily bad.

  13. “Adam Smith’s prescription of “peace, easy taxes, and a tolerable administration of justice” enjoy higher growth rates.”

    I’m not convinced that the Trump administration can do either peace or a tolerable administration of justice.

    1. I’m not convinced that the Trump administration can do either peace or a tolerable administration of justice.

      So far, Trump is doing better than Obama. And he’s doing better than Hillary likely would have done.

  14. Since around 1980, the US has experienced a lot of economic growth,
    with no benefit to most Americans since the richest got all of the
    increase. That will surely continue to happen with future economic growth
    unless we take steps to stop the rich from taking the benefits for
    themselves.

    1. No benefit to most Americans? Americans are much richer and better off today than they were in 1980 There is no denying that. The growth may have produced unequal benefits but it sure as hell benefited the vast majority of Americans.

    2. with no benefit to most Americans

      Really? I would say that the standard of living for most Americans has increased dramatically since the 80s.

      I look around my house and see all kinds of stuff that didn’t even exist forty years ago. From computers to smart phones, flat screen televisions, Netflix, and so on and so forth. When I was a kid air conditioning was a luxury. Now everyone has one.

      Money is not wealth. What matters is what the money can buy. What matters is how much someone has to work in order to purchase something.

      Take a gander at this for example.

      Though to understand this concept one must shed their hatred and envy of those who have more stuff than them, and one must understand that money is not wealth.

      Most people cannot do that.

      1. Thanx fer the link; t’was cool!

        “Most people cannot do that”, you said, and sad to say, ye be correct.

        Most people would rather live in a 10-square-yard roofless shithouse, so long as all their neighbors live in 2-square-yard roofless shithouses, and the dwellers in 10-square-yard roofless shithouses get to smugly LORD IT over those who live in 2-square-yard roofless shithouses!

        And here comes the kicker: We are (many of us) SOOOO hooked on smugness, we’d rather be the smug ones lording it over those in the 2-square-yard roofless shithouses, that we would NOT trade our LORDLY status, in those 10-square-yard roofless shithouses, for one in which we have 10,000 sqr.-yrd MANSIONS, but the others have 1,000,000 sqr.-yrd MANSIONS!!!

        Hung up on relative status, we are…

    3. Since around 1980, the US has experienced a lot of economic growth, with no benefit to most Americans since the richest got all of the increase

      You’re thinking of income brackets incorrectly. “The top 1%” isn’t a fixed population. 10% of the US population will make it into the top 1% of income earners, and the majority will make it into the top 20%. So even if only the top 20% of income earners saw an increase in incomes, the majority of Americans would benefit from that over their lifetime.

      Of course, the analysis on which you base your statement is itself flawed. In fact, almost all American have seen significant increases in wealth, income, and living standards since the 1980’s, those are simply not fully reflected in take-home pay. You can’t simultaneously impose costly requirements on employers and then expect take-home pay to increase as well.

      That will surely continue to happen with future economic growth

      I sure hope so, though it would be nice if jerks like you let low income earners keep more of their income instead of funneling it into useless government programs.

  15. Meanwhile, in 2016, American Action Forum scholars estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years. That would amount to $1.6 trillion in lost wages, spending and other economic activity.

    Let’s say there are 10 million illegals to pick a round number. Average annual per capita government spending is $25000. Over 20 years and 10 million immigrants, that amounts to at least $5 trillion in government spending on these illegal immigrants, spending other American tax payers have to make up for, and that doesn’t even count all the indirect subsidies these migrants receive through programs like ACA.

    So, even these “wages, spending, and other economic activity” were taxed at 100%, they would still amount to less than a third of the cost that these illegal aliens impose on US tax payers. Of course, the US government is unlikely to see more than 10% of that amount in taxes, so we are spending $5 trillion extra in order to gain a fiscal benefit of $0.16 trillion.

    Therefore: Thanks American Action Forum, for making such a strong case for the removal of illegal aliens.

    1. “Average annual per capita government spending is $25000.”

      And do you REALLY think that Government Almighty would actually REDUCE ANY of its total spending, after all of the illegal humans were removed, at great expense? You think that Government Almighty would NOT find any convenient next boogey-monster to justify its ever-increasing spending, and just keep right on spending more-more-MORE?!!?

      Did ye fall off of the turnip truck yesterday, or 2 days ago?

      1. And do you REALLY think that Government Almighty would actually REDUCE ANY of its total spending,

        These people still are excluded from a lot of government benefits. The costs they impose on the US right now are largely through their use of infrastructure, services, schooling, incarceration, and immigration enforcement, and those automatically get reduced when there are fewer people using those services. On the other hand, after legalization, they become eligible for a lot of explicit government programs and benefits.

        So, deporting these people will reduce government spending automatically, but more importantly, it will prevent a massive and ruinous growth in future government spending and entitlements.

        1. Well OK, thanks for being a tad more civil in tone than I was just a tad ago! 🙂

          But I still think that you trust Government Almighty too much. Government Almighty has a long-long history of just moving on to the next boogey-monster to keep on justifying its ever-increasing spending. So the illegal humans are gone, but Government Almighty “servants” still want to keep their jobs. The Donald has just demonstrated that “jobs angst” can get you powered. “Free shit”, envy of others, all those things will persist, no matter how much you and I may rail against them. And Sci-Fi stuff is headed our way!

          Here are some good guesses on HOW Government Almighty will keep on justifying it’s ever-higher spending, even after the illegal humans are gone. I bet just about any of us commenters here could add lots more:

          Women are going overseas to get implanted with genetically improved “monster babies”. Government Almighty must protect our borders from them as well!!

          Border walls need maintained and staffed, and always made more secure!

          Robots are taking our jobs! Government Almighty must protect us from the robots!

          We always need to spend MORE_MORE_MORE on education! And housing! And a clean environment! WHO could DARE to say, spend LESS here?!?!?

          Now that the guns are reduced, we need sensible knife control laws!!!

          Yada-Yada-Yada? As “n” approaches infinity?

        2. You are collectivizing a whole group of people as both sides are wont to do on this issue. I had many Mexican dudes working on my logging crew, many for 15 years. Very family oriented, far harder working than most younger gringos we used and all around good eggs. Immigrants like these guys definitely will add a lot to the economy over time, their kids had learned English to where you couldn’t detect any accent on the phone. Also saw ghettos of illegals in the small Cali town we lived in that stayed to themselves and undoubtedly subsisted on a lot of free shit and some under the table odd jobs.

          So the question neither side can answer is how can we keep the former group and encourage the latter group to leave. As long as we have the welfare state it’s tough to do. Given the sizeable minority of native born that have lived on free shit for generations the horse seems to have long ago left te barn. Collectivizing is not helpful for either side’s advocates.

  16. I wouldn’t serious propose this, but part of me considers the potential benefits of encouraging more workforce participation by eliminating the social security tax. Social Security retirees never elected politicians that balanced the federal budget. There was never a built up savings to draw from to pay social security retirement income.

    What if we replaced this sin tax on work with a 90% inheritance tax? The total inheritance tax collected in one year could be distributed equally among retirement benefit collectors the next year so that the retirement system always has a balanced budget. We can leave it to the baby boomers to decide if the economic logic of abortion also applies to their fellow tenants in the old age homes. “Direct action” became a buzz word this decade.

    1. So I work my butt off, save a nest egg, don’t spend it all to pass on to my kids and you want to take it.

      Why wouldn’t I just spend it all on my death bed?

      Onto your first point, Social Security retirees – true next elected a politician to balance the budget..well they did but politicians lie but let’s ignore that. You seem to think it’s ok to pay into something and get no benefit from it. Social security retires, some for their whole life have paid into social security. Your view is FYTY.

      So like your inheritance tax, and your get rid of social security – you send me your money and I won’t send you anything back. Deal?

  17. Where is the evidence that growth payoff is mostly felt in the lower half of the income distribution and helps lift people out of poverty? That is really not what we have seen over the last 50 years according to almost everything you read these days. With almost all the gains going to those already well off, thanks to a rigged system, it is disingenuous to even discuss “per capita” growth, is it not?

    1. I’m sure de Rugy can provide that evidence. It’s what JFK talked about when he said a rising tide lifts all boats.

      The increased inequality with benefits going to the politically connected rich usually results when there’s more government involvement and control in the economy, and politicians sell favors in commerce to their campaign funding benefactors for that campaign cash. Less inequality and a rising tide occur with free markets.

      And it’s free markets, that makes the poor far better off. Just look at the benefits of cell phones to the poor, where the free market made them very affordable.

  18. For many things, it is not GDP per se which matters, but GDP per capita. Thus whilst restrictions on immigration will almost certainly dent GDP, if they increase GDP per capita (which could happen, if immigration policy preferenced high earners), then people feel that their quality of life increases.

  19. “Meanwhile, in 2016, American Action Forum scholars estimated that the removal of immigrants here illegally would shrink the economy by 6 percent over 20 years. That would amount to $1.6 trillion in lost wages, spending and other economic activity.”

    My dear American Action Forum scholars, you do see thousands of Americans living intents around LA county. Perhaps we should think of employing some of them before employing illegal immigrants.

    1. * living in tents.

  20. On the pro side, we have Kevin Hassett, chairman of the White House Council of Economic Advisers (CEA). He makes a serious case that under President Donald Trump’s policies, 3 percent annual real growth could be a floor.

    On the con side, you have a former chairman of the CEA under President Barack Obama saying that the economic forecast in the budget is the most absurd he’s ever seen.

    Proving once again that macroeconomics is not science but is seeing the future in augury or necromancy, and just as accurate.

    1. Well Hassett has yet to be proven a liar, the data is already in on CEA under President Obama. A swing and a constant miss on predictions.

      I see this as “my team has to say this”.

  21. That was the point. No two, or five, or seven economists, ever have same answer, but chemists can tell you exactly what will happen when X amount of a is combined with Y amount of c. The results have been the same for 200 years since a and c were discovered. Economists can’t do that.

  22. I guess Trump, if he doesn’t get foreign removal of steel and aluminum tariffs then quickly abandons his tariffs plan, will learn what Republicans Smoot and Hawley learned about the idea of “fair trade”. thanks to, as de Rugy puts it, “with idiotic price-raising protectionist policies” of his.

    So many of his tariff defenders, seem to think that since foreign countries burden their citizens with high tariffs to protect certain politically connected industries and their owners, that the US should do it to make it fair. That also ignores the lesson, of two wrongs don’t make a right.

    1. God damn it man, you can’t be making sensible observations ’round here.

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