Trump Team Stands by Budget’s $2 Trillion Math Error

a reply to: Greven

6-page offset, got it. Thank you.

It seems I was sort of 'out of it' last night. As I looked again this morning after reading your post, I noticed the page numbers on the pdf and the page document numbers were offset by 6 pages... duh!

My apologies. I wasn't trying to be dense... honest.

It appears from the wording on page 9 (I will use document page numbers henceforth) that the expectation is for growth to continue over the ten year window so the tax cuts will eventually become revenue positive.

As far as dynamic scoring goes...

That is the true argument. Depending on the specific cuts, both sides are accurate.

Tax cuts can be specific or broad. Both types will increase growth, but too-broad cuts can increase growth in undesired areas. The desired area of growth is the mid-upper level employment market in the US. This can only be accomplished if the tax cuts are tailored to primarily affect small-to-mid-size business.

Give GM $1B, and their CEOs will get more bonuses and they might hire a few new people. The market GM serves is saturated and GM already has their market share. There is little room for growth. Give Walmart $1B and the same thing will happen for the same reason. Give Apple $1B and they will indeed grow and add jobs... overseas. Those jobs will not benefit the US market. But give $1B to a small business or even an individual wanting to start a small business, and the benefit to the US job market would be huge.

Trickle down works.. every time... if properly targeted.

Even your Forbes article (Tim Worstall's biography does not include economics per se, but his writing style is impressive on the subject) is filled with cautions that the information presented is only applicable to most situations. It accepts that tax cuts can spur economic growth appreciably under the right circumstances.

Dynamically, the very concept of tax increases being necessary (or that tax cuts are always undesirable) is frightening. It harkens back to Keynesian economic theory, which is what we have been operating under. Keynesian theory states that government has a duty to regulate economic growth, suppressing it by increasing taxation and increasing it through direct government spending (entitlements, infrastructure, etc.) Theoretically, the return is more immediately desirable than decreasing direct government spending or tax cuts, respectively, but the tendency over time is that government takes more and more from the private sector, reducing its scope and eventually stopping private economic growth.

That is exactly what we have.

There is a middle ground economically, which marries both classical and Keynesian theory successfully to take advantage of both Keynesian efficiency and classical stability. That is to accept that Keynesian efficiency has a limited range of reliability. Outside that range, classical stability is compromised and the efficiency is offset.

For longer than my memory goes, retailers have known this. There is a specific price for any product where profit is maximized. If the price is too low, the profit margin is so small and the additional demand too low to maintain profit levels; if the price is higher, the profit margin may be high, but the drop in demand exceeds it and lowers the total profit level. If I am selling a whatsit, and I charge exactly what it costs to make it, my profit is zero regardless of how many sales I make. If I charge so much that no one buys it, my profit is zero, regardless of how much I make per sale.

Taxes work the same way. Raise them too high, and no one will take the risks to conduct business here, because the reward is too low. Cut taxes too much and the economy might take off like a rocket-powered slingshot, but it will not benefit the budget. We need that middle ground and I believe at this time that a tax plan that reduces taxes on entrepreneurship and small businesses will have positive, not negative consequences.

TheRedneck

a reply to: matafuchs


Pretty simple you say? OK, try this on:

Here are the total Budget outlays (that's what the gov't pays out. Also known as 'spending') for 2015, 2016, and estimated for 2017-2019 based upon Trump's budget as submitted:

2015: $3.36T
2016: $3.54T
2017: $3.65T
2018: $3.76T
2019: $3.93T

So show me your 'simple' spending cuts.

source

He's not 'cutting spending' at all. He's just spending on different things --- and 3% more, BTW.

Well some more detailed analyses are coming out.

From the Washington Post:

The impossible magic math of Trump’s budget proposal, explained

www.washingtonpost.com...

Here are a couple of comments by those interviewed (and a chart from the Committee for a Responsible Federal Budget):

“On the one hand,” Hanlon said, “they’re saying it is not fully formed. On the other hand, they’re saying it will boost the economy by more than any mainstream economist would say is at the outer limit of what’s possible.”

According to Cole, “a tax plan that’s dynamically neutral wouldn’t be enough” to hit $2 trillion. “They have more tax revenue in this budget than the [Congressional Budget Office] has in its baseline,” he said. “They have a greater amount of taxes collected. And that is — quite something.”

Furman’s view: “This is not an accidental mistake. This is a mistake that happens to people that have a ludicrously optimistic view of the impact of tax cuts and also don’t bother to actually specify or work out any of the policy details.”

Then there is the analysis from a Capitalist free market site:

Reason.com

reason.com...

Called - simply:

Trump's Budget Plan: The Good, the Bad, and The Ugly

It doesn't cut overall spending, it's based on gimmicks, but it does slash some programs.

In this sense, Trump's budget encapsulates his promise and peril as president. He is devoid of clearly articulated principles and there are many reasons to expect him to do real damage to the economy and the country.

They also have a summary budget from OMB for your perusal:

d1jn4vzj53eli5.cloudfront.net...

Read it - small government types should approve and others who want to cut valuable programs.....

This is interesting -

Former Heritage Scholar Is Now Drafting Trump's First Budget February 20th, 2017

Note the date - February 20th 2017.

www.heritage.org...

I was looking for their take on the accounting error. Well they have a lot on how 'bitchen' the budget is but no mention of the huge accounting error.

www.heritage.org...

The date on this one was yesterday (5/23/17) - seems like it was all prepared before THE ERROR was found. They must have had an advance copy which they praise without every noticing THE ERROR.

Vox.com has speculated that an internal war for power has been won by trump troops which would appear to be the case.

originally posted by: FyreByrd
a reply to: 3NL1GHT3N3D1

No - only a stupid executive would allow such a blatant idiotacy. Stupid and incompetent.

id·i·o·cy
noun
extremely stupid behavior.

But hey at least you don't go around throwing stones from your glass abode

a reply to: FyreByrd

You mean the links that do nothing but tell of an error that we have no way to fact check?

Or how about the "quotes."

Here's an example copied from your previous post.

"When pressed about the unorthodox math in a briefing with reporters on Monday, White House budget director Mick Mulvaney seemed to admit, effectively, that his team had made up the numbers because they wanted them to look good, and they’d figure out the details later ."

You do realize of course that nothing about that entire paragraph is an actual quote by Mulvaney right?

And ftr, though I did vote, it wasn't for Trump or Hillary and am a registered Democrat. That said, I prefer to deal with facts, and don't swallow any anti Trump "news" that is spoon fed to me without due diligence. Which is why The Redneck, and xuenchen are the ones who are making sense here. And you are showing your partisan tushy.

a reply to: Deez349849

You mean the links that do nothing but tell of an error that we have no way to fact check?

And it's not even an error... it's an assumption. The same kind of assumption that is used on every business plan ever developed.

Thank you for the compliment! Proud Independent here.

TheRedneck

originally posted by: knowledgehunter0986
a reply to: DBCowboy

Serious question, because I'm ignorant when it comes to this budget thing.

Everyone seems to be foaming at the mouth and knee-jerking, so I'm really curious what the actual implications are.

WW3?
America is going broke?
Trump can't count?
Aliens are coming?

WHAT IS IT?!?!

The consequences are none really. Basically, the President writes a budget, and it's essentially a wishlist to Congress of what they want. It's totally non binding. Congress makes the budget. So basically, the consequences are that Trump was lying to congress in how he was playing with the numbers to get the results they wanted.

So really, it just means the House will ignore it, which they were probably going to do anyways.

originally posted by: AnonyMason
a reply to: TinySickTears

... people are starting to see him for the pile of flabby skinned, terrible fake tan spray, bad hair pieced pack of lies that he is.

When you lash out like an angry child, which you typically do (I've come to notice), it really takes away from any validity your arguments might have. It makes your referencing of Trump as "President Manbaby" ridiculous. This is in-fact the type of behavior I would expect from Trump himself.

a reply to: AnonyMason
has this budget been signed off by congress ? because until they do isn't it just a pile of paper.