Quote:
Originally Posted by 69in2it69
I cut some of your post so this one wouldn't be so long, but just so I'm getting it right...you're saying that a measure Trump took in 2017 is now showing benefit in 2023, 6 years later? Yes, it takes time for things to take affect.
But WHO does that mean would be responsible for the economy during Trump's 4 years in office??  |
69in2it69, GDP growth and our general level of prosperity are affected by changes in technology, globalization, demographic changes like population growth, changes in productivity, the business cycle, Fed policy, events like the pandemic, what's happening in other countries, etc. And yes, the politicians and government make a difference. Not just who's president, but Congress, the bureaucracy, and leadership at the state and local level.
So trying to correlate economic performance in the long term with who's president doesn't make a lot of sense to me.
In the short term, yes, politicians can boost the economy with policies that affect aggregate demand. For example, that's what Biden and Congress did in 2021 with the American Rescue Plan (ARP). You send $1400 checks to most Americans and if they spend the money that should juice the economy. I'd argue though that the ARP backfired. It ignited inflation here in the USA, and added to our national debt. It's like a sugar high.
The TCJA was a long term fix. Take a look at this, and sort the countries in order by corporate income tax rate:
https://en.wikipedia.org/wiki/List_o...s_by_tax_rates
The average state corporate tax rate is 6.8%. Added that to the 35% federal rate, pre-TCJA, and we had a 41.8% average corporate rate in the USA.
That would be the highest in the world today!
The highest in the developed world is Australia, at 30%. And Australia has no tax on dividends paid by corporations, provided they're paid out of accumulated profits. (The USA taxes dividends at maximum rates of 23.8% to 37.1%, depending on the state.)
So when a corporation, U.S. or foreign, is looking at investing, why would it chose the USA, with a 35% to 46.5% rate (depending on the state) over, say Ireland, which has a 12.5% tax rate?
When you kick out petrostates and countries with less than a million people, the most prosperous developed countries in the world have lowest government revenues and expenditures as a % of GDP. That is, the governments are leaving more money in the private sector, in the hands of the people and businesses. That's the best way to grow an economy in my opinion. Republicans, while they are spendthrifts when they control the presidency and both Houses of Congress, come closer to this ideal than Democrats. Which is why I prefer Republicans over Democrats.
Put another way, Republicans are mostly believers in supply side economics. Provide the conditions for the private sector to grow and prosper, and the country will do well.
