Friday, March 28, 2025
After 38 years, it's time to junk the bedrock idea undergirding conservative economic philosophy of low taxes because IT'S NOT TRUE
AXIOS today, here:
A bedrock idea of conservative economic philosophy is [the] idea that low taxes fuel economic growth.
This idea is simply false, and history proves it.
We've had 38 years since the Reagan Tax Reform Act of 1986 to prove it correct and it's not.
Real GDP 1986-2024 has grown at a compound annual rate of 2.586%, a rate 29% worse than for the same length of time before that when taxes were much higher.
Real GDP 1948-1986 grew at a compound annual rate of 3.635%.
Tax reform is a complicated topic, the political subject of the AXIOS article.
I can simplify it for you: Tax like we used to in the immediate post-war.
Nominal marginal rates in 1957 (dollars are NOT adjusted for inflation in the tables), the height of the Baby Boom, went from 20% to 91%.
The set up didn't stop people from marrying, having children, and buying houses, and it didn't stop economic growth, because it forced rich people to avoid these confiscatory marginal rates by investing their money domestically to earn income at lower rates of capital taxation.
Ronald Reagan's tax reform was a license to invest elsewhere, and we're all poorer for it.
If Democrats had any brains they would propose richly rewarding domestic investment using the tax code and severely punishing foreign investment. They could start by raising top marginal tax rates on ordinary income and offering much lower long term capital gains tax rates de-linked from ordinary income but only for domestic investment.
The country desperately needs much better economic growth, and the libertarian-Republican consensus is not providing it.
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| Investment abroad eclipsed investment at home for the first time in 1993 and is 200% of domestic today |
Just as 9.7 million of 43 million student loan borrowers become past due again, cars they can't afford to buy anyway soar in price due to tariffs, a one-two punch alienating the youth vote from Trump
Over 9 million student loan borrowers past due after bills restarted, Fed estimates
... A new student loan delinquency can cause a borrower’s credit score to drop more than 150 points, the Fed warns.
... The tariffs will kick in at midnight on April 3, and Trump has said they will be “permanent.” ...
... A spokesperson for Klarna acknowledged to NBC News that people needing to pay for meals on credit is “a bad indicator for society.” ...
Latest Trump minerals deal with Ukraine carves up the invaded country between Trump and Putin even worse than before
Trump's minerals deal with Ukraine is an expropriation document, demanding half of its oil and gas, almost all of its metals, and now also much of its infrastructure in reparations.
Black radicals want reparations from whites. The radical Trump wants to gobble up most of Ukraine.
Ambrose Evans-Pritchard, here:
Donald Trump is holding a gun to the head of Volodymyr Zelensky, demanding huge reparations payments and laying claim to half of Ukraine’s oil, gas, and hydrocarbon resources as well as almost all its metals and much of its infrastructure.
The latest version of his “minerals deal”, obtained by The Telegraph, is unprecedented in the history of modern diplomacy and state relations. ...
It dovetails with parallel talks between the US and Russia for a
comprehensive energy partnership, including plans to restore West
Siberian gas flows to Europe in large volumes, with US companies and
Trump-aligned financiers gaining a major stake in the business.
The revived gas trade would flow through Ukraine’s network, and later via the Baltic as the sabotaged Nord Stream pipelines are brought back on stream. ...
Prof Riley said: “It is not compatible with EU membership, and perhaps that is part of the purpose. I have to wonder whether the real intention might not be to force Zelensky to reject it.” ...
Germany’s Bild Zeitung said talks have been underway for weeks in Switzerland to reopen the Nord Stream 2 pipelines, conducted secretly by ex-Stasi agent Matthias Warnig and Mr Trump’s envoy Richard Grenell, a man known for his Kremlin sympathies.
The terms would give US contractors operational control and a fat revenue stream, creating money out of “thin air”. A cynic might call it a legal “donation” to Mr Trump’s circle by the Kremlin.
“There is talk about Nord Stream. It would be interesting if the Americans put pressure on Europe, to make them stop refusing our Russian gas,” said Sergei Lavrov, Russia’s foreign minister. ...
All evidence so far is that Trump & Putin Inc is a perfectly harmonious joint venture.
The new Axis of Evil: Putin and Trump are tag-teaming to carve up the world
Russia’s Putin says it would be a ‘profound mistake’ to dismiss Trump’s push for Greenland
“In short, the United States has serious plans regarding Greenland. These plans have long historical roots, as I have just mentioned, and it is obvious that the United States will continue to consistently advance its geo-strategic, military-political and economic interests in the Arctic,” Putin said.
Democrats united under Hakeem Jeffries in the US House are the only ones in American politics above water right now
US House Democrats voted unanimously against the Republicans' continuing spending resolution under -4.2 underwater Republican Speaker Mike Johnson (except for Democrat Jared Golden [ME-2], a Blue Dog Democrat who under ranked choice voting in Maine wins by being the second choice of people who voted for someone else).
Senate Minority Leader Democrat Chucky Schumer (-19.6) led eight other Democrats in the US Senate to pass the continuing spending resolution.
Republicans are jumping the shark. Opposing that is popular.
Democrats, are you listening?
Core pce inflation in February 2025 was 2.8% year over year, 75% higher than the 1.6% average 2017-2020
The last eleven months have seen the year over year measure fluctuating between 2.88% and 2.63%.
Zero progress since April 2024, when the measure rounded to 2.9%, same as in December.
Yeah, but your leaders wear Tiffany and Rolex, that's what counts.
Thursday, March 27, 2025
Real GDP update for Mar 27, 2025
The third report for real GDP for 4Q2024 and full year 2024 was released today here.
The annual rate of economic growth in 4Q was 2.4%, and 2.8% for 2024.
But here's the big picture.
Real GDP for the 79 years 1929-2008 grew at a compound annual rate of 3.405%.
Real GDP for the 16 years 2008-2024 grew at a compound annual rate of 2.074%, a rate 39% lower.
We have not had, and do not now have, the greatest economy ever at any point since the Great Recession.
Russia repeatedly violates ceasefire on Ukrainian energy infrastructure
Zelenskiy says Russia hit Ukraine’s power infrastructure, US should react
President Volodymyr Zelenskiy said on Thursday Russian artillery had
damaged Ukraine’s energy infrastructure in the front-line city of
Kherson, two days after the U.S. announced that each side had agreed to a
truce on energy strikes. ...
Russia, which launched a full-scale invasion of Ukraine in February 2022 and now holds about 20% of the country, contends that it has observed an energy strike truce since March 18. Ukraine says Russia has attacked eight Ukrainian energy facilities since that date. ...
It's important to remember that screw-up Pete Hegseth is SECDEF because of J. D. Vance
... Vice President Vance had to break a tie vote to get Hegseth confirmed after three Republicans — Sens. Susan Collins (Maine), Lisa Murkowski (Alaska) and Mitch McConnell (Ky.) — voted no. ...
More.
LOL Stefanik stays in the House even though Democrats are down two seats due to recent sudden deaths
Whipping the vote for Trump in the GOP-led House must be getting harder and harder given all the mayhem he's causing for Republican voters in Republican districts, who are losing their government jobs and are becoming afraid for their Social Security among other things.
Assuming Republicans keep FL-1 and FL-6, they'll be back to 220 since Stefanik isn't leaving for the UN, but apparently a temporary seven-vote majority is needed because for some legislation the GOP still doesn't have the votes.
White House withdrawing Stefanik nomination to serve as U.S. ambassador to UN
... House Republicans had expressed concern that if Stefanik was confirmed, it would have made it tougher to get Trump’s agenda through the lower chamber because Speaker Mike Johnson (R-La.) would have lost a vote in his conference and didn’t have a clear idea how long it would take New York Gov. Kathy Hochul to schedule a special election to fill the seat.
Gold made another new record high price today at $3,059.30, the 17th new high of the year
According to CNBC here.
An earlier version of the story incorrectly stated a futures price as the new high spot price.
None other than Bernard-Henri Levy, the French Jewish author of the book The Will to See, puts then Representative Mike Waltz (FL-6) and Jeffrey Goldberg of The Atlantic together in October 2021, thanking them for coming to his book launch
Trump National Security Adviser Mike Waltz denies ever meeting the guy he was standing near.
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