Trump's Economic Program: What Should It Be

10 posts

Don Johnson

Trump ran on standard Keynesian policies, and it looks like that's generally what he's going for.

Testos Terone

I think, at this point, it has become impossible to run a budget without a deficit. Some people should actually do the exercise and try to balance a budget knowing the statistics released by the United States government.

He did, but who's to say that is really what he thinks. He basically was a Keynesian on some issues and then Reaganomic on the others. Basically he changed his viewpoint depending on whoever he was talking to. In the recent ABC interview, he said he liked Reagan, but not his economic policy. He rules very chaotically. We're talking about a man who had three casinos, competing with eachother in the same city.
Broseph

Orothodox Keynesian view is that the gov't can spend money on ditch digging and ditch filling and that will be a positive impact on the economy because you're creating jobs and putting money into the system.

Trump's looking to cut spending in many areas and give out less money to get more. The above view isn't concerned with getting a deal because more money is better now matter how it's spent.

He wants to spend on infrastructure to help business. This is needed and currently, it's the gov'ts job to make this happen and make this available. He sees a huge lack and sees spending as necessary to help the economy along. His view is practical, not Keynesian.

chairman

Trump's hiring freeze belies any real "Keynesian" ideology. Which is too bad, the hiring freeze is definitely one of his worse ideas. It's more accurate to say Trump just isn't ideologically dedicated to low-spending and service-cutting like most Republicans.

Broseph
Not freezing the expansion of giving sinecure to people who don't deserve it is one of his worst ideas?

Do you honestly believe in the Keynesian multiplier?
chairman

I don't know why you wouldn't.

One of the government's primary goals should be to increase the demand for labor. The government should rather be expanding its employment and moving toward some kind of job guarantee.

Jargon
It's necessary to understand that public debt and growth are tautological, not intrinsically necessarily, but because of the way our monetary system is designed to function. It's impossible to run a budget without a deficit and have economic growth. Running surpluses necessitates monetary contraction and therefore economic contraction and those are the rules (the Clinton 'surpluses' were not genuine, just a shift of intra-governmental holdings from one hand to the other). Our monetary system is designed such that expansion of base-money equals budget deficit. People also need to understand that there are varying degrees of "badness" to public debt. As long as we're caught in this situation, it's important to recognize that contractions in the money supply are far, far worse than running a deficit, which, depending on how it's carried out, may have several different effects, not all of them bad. The worst type of public debt is that held by foreign parties (gov'ts, banks, etc.) as these are the least possible to renegotiate; this represents money taxed out of the country and paid to interest to foreign creditors. Second worst type is that held domestically by banks and private citizens as these are, at least conventionally, subject to the state's domain and therefore more possible to renegotiate and represent less of a loss of income from taxes going to pay debt; since the owners of the debt are conceivably the ones paying the taxes, no money is being lost (though this isn't really an accurate picture; more accurate as a redistribution of income from those who don't own US bonds to those who do). Least worst is (get ready libertarians) the debt held by the Federal Reserve as this is essentially an intragovernmental holding; the Fed plows the bond plus the interest back into the treasury upon maturity; private citizens ultimately pay no tax on this. The Fed holding bonds is the closest thing we have to just printing money debt-free.

Broseph you are trying so hard to have your cake and eat it too! Federal deficit spending on infrastructure is literally the most fundamental plank of Keynesian policy and thought.

I don't mean to use you as an example but many libertarians talk of 'believing' X or Y economic assertion. It's strange, if it's logical, then let it hold and if it isn't, then don't. Along these lines, I think I remember some video of the Mises Institute, where they were all having their speeches, and either Thomas DiLorenzo or Robert Wenzel or someone else was at the podium and pulled out their single-volume copy of Human Action and frustratedly shouted at the crowd, like a crazed priest winging the book around "Either you believe in the laws of supply and demand or you don't! Either you believe in Say's Law or you don't!"
Broseph
That is not to say that a budget deficit is necessarily a Keynesian solution. The notion in that approach is to put money in the system to make circular flow faster. This is different from explicitly building infrastructure with intended purposes for helping specific parts of the economy.

YouTube: https://www.youtube.com/embed/jaED2ErdIv8
Jargon
Which parts exactly? Is there a certain way that buying loads of industrial materials for infrastructure projects will not generally increase the bottom-line for the country's industrial firms? And if so, is this the way we should conduct our infrastructure spending projects, so as to avoid coming dangerously close to Keynesianism?

It's a bit like asking "What's the difference between fingering your butt-hole and fingering your butt-hole in a non-gay way?" Not much.
Broseph

The Keynesian view is that more money is needed in the system to get out of an economic slump/spur growth. (see circular flow) This could mean building infrastructure, hiring people to dig and fill holes, or cutting cheques for everyone. The mechanism by which it claims to improve economic conditions is not through smart or necessary investment, but just by getting money into people's hands.

There are many ways for a gov't to spend money. Digging and filling holes doesn't create new business opportunities or more ways to produce wealth. Building railroads does, however.