[Vision2020] Boost from Tax Cuts: from 1 to zero percent increase in GDP

[Ted Moffett]

A significant number of credible economists are predicting an economic
recession is within a single digit number of years away.  The
Trump/Republican tax cuts may in the long term even make this worse, given
the impact on the national debt.

I know this merely by listening to Consuelo Mack's *WealthTrack PBS TV
show!*

A few articles on these issues:

Is a recession on the horizon? See what top economists say
Amanda Dixon @amandaadixon   <https://twitter.com/amandaadixon>
May 30, 2018  in  Smart Money
<https://www.bankrate.com/personal-finance/smart-money/>

https://www.bankrate.com/personal-finance/smart-money/economic-survey-may-2018/
*Is a recession around the corner?*

The current bull market celebrated its ninth birthday in March. But the
next economic slowdown could be closer than you think.

In all, more than three-quarters (78 percent) of the economists who were
surveyed think a recession will rear its ugly head within three years:
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The Wealth Track episode can be watched/listening to at the following
website:
FINANCIAL MARKETS WARNING: T-BOND MANAGER ROBERT KESSLER SAYS PLAY IT SAFE,
THERE IS DANGER AHEAD
<https://wealthtrack.com/financial-markets-warning-t-bond-manager-robert-kessler-says-play-it-safe-there-is-danger-ahead/>
February 16, 2018

https://wealthtrack.com/financial-markets-warning-t-bond-manager-robert-kessler-says-play-it-safe-there-is-danger-ahead/

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Vision2020 Post: Ted Moffett

On Tue, Jul 10, 2018 at 10:47 AM, Nicholas Gier <ngier006 at gmail.com> wrote:

SAN FRANCISCO (Reuters) – The economic boost from U.S. President Donald
> Trump’s $1.5 trillion tax cut will probably fall well short of most
> analysts’ “overly optimistic” expectations, two economists wrote Monday in
> the San Francisco Federal Reserve Bank’s latest Economic Letter.
>
> Instead of the boost to GDP growth this year of about 1.3 percentage
> points estimated by the Congressional Budget Office and other forecasters,
> they wrote, “the true boost is more likely to be less than 1 percentage
> point,” with some studies pointing to as little as zero.
>
> That is because fiscal stimulus has a large effect on economic activity
> when unemployment is high and personal finances are constrained, but it
> delivers much less of a jolt when the economy is strong, they wrote.
>
> In June the U.S. unemployment rate rose slightly to 4 percent, much lower
> than most economist estimates of a sustainable rate, as businesses added
> many more jobs than expected and more job seekers entered the labor force.
>
> Governments typically increase deficits with spending and tax cuts when
> times are tough, not when an economic expansion is barreling toward
> becoming the longest running in U.S. history.
>
> Doing so raises concerns about the nation’s capacity to combat future
> downturns, particularly if it does not deliver outsized economic gains in
> the meantime, the report suggests.
>
> “Recent research finds that the effects of fiscal stimulus on overall
> economic activity are much smaller during expansions than during
> downturns,” wrote Tim Mahedy and Daniel Wilson, fomer and current San
> Francisco Fed economists, respectively.
>
>
> A society grows great when old men plant trees whose shade they know they
> shall never sit in.
>
> -Greek proverb
>
> “Enlightenment is man’s emergence from his self-imposed immaturity.
> Immaturity is the inability to use one’s understanding without guidance
> from another. This immaturity is self- imposed when its cause lies not in
> lack of understanding, but in lack of resolve and courage to use it without
> guidance from another. Sapere Aude! ‘Have courage to use your own
> understand-ing!—that is the motto of enlightenment.
>
> --Immanuel Kant
>
>
>
>
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