4 ms·

Oh, yes, indeed! Let us invest, using the fantastic negative-$864 billion/month budget surplus that we have been so blessed as to earn amidst this global pandem

Oh, yes, indeed! Let us invest, using the fantastic negative-$864 billion/month budget surplus that we have been so blessed as to earn amidst this global pandemic.

paulmd 6y ago
Provoking people into this exact argument was, in fact, the entire point of blowing up the budget deficit in the first place. Put military spending, corporate tax rates, and upper income tax rates back to where they were, and re-allocate that money to productive infrastructure and it'll be fine.
- titzer 6y ago
  It's a shame that Coronavirus doesn't succumb to cruise missiles, predator drones, and air-superiority fighters....it almost seems like we spent money on the wrong things!
  - arvinsim 6y ago
    Sssshhh! Don't give them ideas to weaponized viruses!
- fennecfoxen 6y ago
  I am confused; you seem to say that trillions of dollars in US taxation and spending were chosen primarily for their rhetorical effect? This seems like a pretty stunning accusation to make against policymakers.
  - kemayo 6y ago
    There has been a long-term effort by the Republican party to shrink government, the core of which is often called "starve the beast"[1]. The idea is that by cutting the revenue of the government, it will have to reduce spending on things like, say, a national high-speed rail system. So, yeah, regardless of how you feel about the goal, I don't think it's unfair to say that trillions of dollars in US taxation and spending were chosen primarily for their rhetorical effect. Being able to say "but we can't afford that!" was a top goal in recent tax policy. [1]: https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast
    - fennecfoxen 6y ago
      How curious. Well. I did some basic math. The figures I found online indicate that the 2017 tax cuts reduced total revenues in 2018 from forecasts, by about $275 billion. The June 2020 deficit was, as noted, $864 billion in a single month. This suggests that the added revenue from restoring taxes to "where they were" would pay for June's deficit over the next ~4 years — well, three and a bit, and you have to account for the revenue drop in a crisis. This is, of course, on top of the $779 billion deficit in 2018 and the $984 billion deficit in 2019. And, of course, there are multiple months in 2020. I think the general point stands, unless you're going to raise taxes VERY high or go full "money printer go brr" perhaps?
      - kemayo 6y ago
        Depends on where the earlier commenter meant when they said "where they were"; the 2017 cuts were just the latest in a long line. For instance, if we rolled all the way back past Reagan's 1981 tax cuts, we'd be up to a 70% top marginal tax rate (it's currently 37%). They also wanted to cut military spending, which has gone up by a fair bit in the same time period, and meddle with corporate taxes. It's probably fair to say that all this would have a big impact on that deficit. It's unlikely to cover the 2020 economic-crash monthly deficit, of course... but hard times are the right time to go full deficit-spending to try to prop up the economy. Money printer can, indeed, go brr if it'll slow a collapse. So says mainstream economic theory.
  - deleted 6y ago
    [deleted]
amiga_500 6y ago
If you borrow to invest for the future by adding value, you grow. Everyone seems delighted to borrow ever more against existing housing stock, which creates nothing.
- fennecfoxen 6y ago
  Yes, but only if you add value. It is of course possible to borrow to invest in the future, and lose value, particularly given the time value of money. Do you think this proposed investment is being made with conservative, reliable underwriting, such that we can be confident that it will deliver value?
  - imtringued 6y ago
    What if people are doing nothing with their time [0]? If that's the case it wouldn't matter what the money is spent on. Of course it would be better to optimize everything perfectly but that is a luxury that's not available to everyone. [0] Most likely mass unemployment due to the corona virus.
    - fennecfoxen 6y ago
      Please avail yourself of an economics work and read about what the "time value of money" is and how little it is connected to unemployment. You will be able to engage in a coherent discussion. Thank you.
    - amiga_500 6y ago
      Yes, I agree. You have a fence that needs painting, paint, a brush, and a guy who is about to spend the day watching daytime TV. Yet we are told, no!, do not pay this man, we can't afford it. We cannot get that day back when the sun sets. Economics has let us down very, very badly.
- deleted 6y ago
  [deleted]

Oh, yes, indeed! Let us invest, using the fantastic negative-$864 billion/month budget surplus that we have been so blessed as to earn amidst this global pandemic.

paulmd 6y ago

Provoking people into this exact argument was, in fact, the entire point of blowing up the budget deficit in the first place. Put military spending, corporate tax rates, and upper income tax rates back to where they were, and re-allocate that money to productive infrastructure and it'll be fine.

titzer 6y ago
It's a shame that Coronavirus doesn't succumb to cruise missiles, predator drones, and air-superiority fighters....it almost seems like we spent money on the wrong things!
- arvinsim 6y ago
  Sssshhh! Don't give them ideas to weaponized viruses!
fennecfoxen 6y ago
I am confused; you seem to say that trillions of dollars in US taxation and spending were chosen primarily for their rhetorical effect? This seems like a pretty stunning accusation to make against policymakers.
- kemayo 6y ago
  There has been a long-term effort by the Republican party to shrink government, the core of which is often called "starve the beast"[1]. The idea is that by cutting the revenue of the government, it will have to reduce spending on things like, say, a national high-speed rail system. So, yeah, regardless of how you feel about the goal, I don't think it's unfair to say that trillions of dollars in US taxation and spending were chosen primarily for their rhetorical effect. Being able to say "but we can't afford that!" was a top goal in recent tax policy. [1]: https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast
  - fennecfoxen 6y ago
    How curious. Well. I did some basic math. The figures I found online indicate that the 2017 tax cuts reduced total revenues in 2018 from forecasts, by about $275 billion. The June 2020 deficit was, as noted, $864 billion in a single month. This suggests that the added revenue from restoring taxes to "where they were" would pay for June's deficit over the next ~4 years — well, three and a bit, and you have to account for the revenue drop in a crisis. This is, of course, on top of the $779 billion deficit in 2018 and the $984 billion deficit in 2019. And, of course, there are multiple months in 2020. I think the general point stands, unless you're going to raise taxes VERY high or go full "money printer go brr" perhaps?
    - kemayo 6y ago
      Depends on where the earlier commenter meant when they said "where they were"; the 2017 cuts were just the latest in a long line. For instance, if we rolled all the way back past Reagan's 1981 tax cuts, we'd be up to a 70% top marginal tax rate (it's currently 37%). They also wanted to cut military spending, which has gone up by a fair bit in the same time period, and meddle with corporate taxes. It's probably fair to say that all this would have a big impact on that deficit. It's unlikely to cover the 2020 economic-crash monthly deficit, of course... but hard times are the right time to go full deficit-spending to try to prop up the economy. Money printer can, indeed, go brr if it'll slow a collapse. So says mainstream economic theory.
- deleted 6y ago
  [deleted]

amiga_500 6y ago

If you borrow to invest for the future by adding value, you grow. Everyone seems delighted to borrow ever more against existing housing stock, which creates nothing.

fennecfoxen 6y ago
Yes, but only if you add value. It is of course possible to borrow to invest in the future, and lose value, particularly given the time value of money. Do you think this proposed investment is being made with conservative, reliable underwriting, such that we can be confident that it will deliver value?
- imtringued 6y ago
  What if people are doing nothing with their time [0]? If that's the case it wouldn't matter what the money is spent on. Of course it would be better to optimize everything perfectly but that is a luxury that's not available to everyone. [0] Most likely mass unemployment due to the corona virus.
  - fennecfoxen 6y ago
    Please avail yourself of an economics work and read about what the "time value of money" is and how little it is connected to unemployment. You will be able to engage in a coherent discussion. Thank you.
  - amiga_500 6y ago
    Yes, I agree. You have a fence that needs painting, paint, a brush, and a guy who is about to spend the day watching daytime TV. Yet we are told, no!, do not pay this man, we can't afford it. We cannot get that day back when the sun sets. Economics has let us down very, very badly.
deleted 6y ago
[deleted]