sycasey said:
concordtom said:
Thx for the facts.
They are stimulating the current economy and selling our future.
Not even sure how much they're stimulating it. Seems like we're just on the same gradual upward trajectory we had during the Obama years.
After I got my MBA I realized that almost all the prevailing economics math was linear algebra. When compared to other math applications of calculus to explain the world.
The whole deficit explanation/projection is based on the naive assumption that the effect of a deficit is fixed, a trillion dollar deficit always produces the same effect. That is the velocity math model. Over the years I have become convinced in the acceleration math models. that is the deficit has to accelerate each year to provide the same economic stimulus. Deficit spending has seemed to work best when there was a balanced budget and then the government starts to spend money it doesn't have and the deficit effect initially has a big impact. But to me that in order to carry that economic stimulus forward the annual deficit has to increase each year by the same amount (acceleration). so the annual deficit has to grow at an ever faster rate.
One trillion the first year, two trillion the second year, three trillion the third year, four trillion the fourth year, 5 trillion the fifth year. If you maintain the deficit at one trillion annually, after five years the total accumulated deficit has grown five trillion. Under my projection in five years the accumulated deficit has grown FIFTEEN trillion, three times as much due to deficit acceleration to maintain ongoing, steady economic stimulus. Obviously a balanced budget, providing deceleration by removing deficits would negate or reverse previous economic growth stimulus.
The Obama administration thought that execution/timing would also enhance economic stimulus, Congress had been told about "Shovel Ready Projects" that could start within 90 days of funding providing a rapid response to an influx of deficit dollars. For Obama, as President, quickly found out the various Federal agencies had cooked the books and the vast majority of shovel ready projects did not really exist. Many eventually got built but did not start in 90 days but in his second term. Under the new tax rates and budget my gross income has been unchanged but the withholding of my pay has increased resulting in a net loss. I had a lot of deductions for state income tax and property tax as a single senior. The Trump tax breaks are aimed at couples and those with dependents. At the same time as my adjusted gross income increases due to the loss of deductions, the 2018 marginal tax rate for my AGI is actually higher than the 2017 rate for the same AGI. If I lived in a state subsidized by the Federal Government, a higher standard deduction would have reduced my AGI. Unfortunately it won't be until a couple of months after this November's election when American Tax payers find out they have been hoodwinked by the illusion of tax breaks creating a deficit stimulus.
