❝ It is a post-financial-crisis myth that austerity-minded conservative governments always favor fiscal prudence, while redistribution-oriented progressives view large deficits as the world’s biggest free lunch. This simplistic perspective, while perhaps containing a grain of truth, badly misses the true underlying political economy of deficits.
The fact is that whenever one party has firm control of government, it has a powerful incentive to borrow to finance its priorities, knowing that it won’t necessarily be the one to foot the bill. So expect US President-elect Donald Trump’s administration, conservative or not, to make aggressive use of budget deficits to fund its priorities for taxes and spending…
❝ One only has to recall recent US economic history…to see the absurdity of claims that Republicans always aim to balance the budget while Democrats always try to spend beyond the country’s means. Back in the 1980s, conservative hero Ronald Reagan was willing to tolerate enormous deficits to fund his ambitious tax-cutting plans, and he did so in an era when borrowing wasn’t cheap.
In the early 2000s, another Republican president, George W. Bush, essentially followed Reagan’s playbook, again slashing taxes and sending deficits soaring. In 2012, at the height of the standoff between the Republican-controlled Congress and Democratic President Barack Obama over deficits and the national debt, Republican presidential candidate Mitt Romney proffered an economic plan that featured eye-popping deficits to finance tax cuts and higher military spending.
❝ On the other side of spectrum, Democratic President Bill Clinton, during what most academic economists consider to have been an extremely successful presidency, actually put the government into surplus. Indeed, at the end of the 1990s, some researchers actually wondered how international markets would function if the US government gradually retired all of its debt. Bush’s subsequent tax cuts and unfunded wars ensured that this never became a problem.
❝ What matters is not only the level of debt, but also how it is managed…But anyone counting on interest rates staying low because conservative governments are averse to deficits needs a history lesson.
Alas, we now have a president who needs lessons in history, economics, political economy, basic physics, etc. plus self-help on addictive lying, narcissism and more. As unlikely to listen to Ken Rogoff as is his peer-group neo-con Republicans.
❝ A pack of Nobel Prize-winning economists gave Donald Trump and his policy plans the thumbs-down on Friday, with one saying the president-elect’s programs could lead to a deep recession.
Speaking on a panel during the first day of the annual American Economic Association meeting in Chicago, the Nobel laureates voiced a variety of concerns about the billionaire developer’s stance, from his haranguing of U.S. companies about their outsourcing plans to the risk that his tax and spending proposals could lead to run-away budget deficits.
“There is a broad consensus that the kind of policies that our president-elect has proposed are among the polices that will not work,” said Joseph Stiglitz, summing up the views of the panel that included his fellow Columbia University professor Edmund Phelps and Yale University’s Robert Shiller…
❝ …While other presidents have run big budget deficits in the past, they depended on foreign purchases of U.S. debt to do so.
With Trump threatening to renegotiate U.S. trade agreements and shift to an “America First” policy, the willingness of foreigners to keep buying U.S. government securities can’t be taken for granted, University of Chicago’s Roger Myerson said.
America’s interaction with other countries “has to be based on confidence and trust,” Stiglitz said.
The world view of the United States – right now – wavers between contemptuous laughter and risk-based angst. In my mind, quite justifiably.
❝ In the year since the Paris climate agreement was concluded, the world’s efforts to limit global warming to 2º Celsius above pre-industrial levels seemed to gain momentum. Enough signatory countries took the necessary steps to formalize the agreement to ensure that it entered into force on November 4. Meanwhile, in October, the international community reached a separate aviation – related climate accord, which covers an area that the Paris agreement did not address; and agreed to amend the 1989 Montreal Protocol to phase out hydrofluorocarbons – a potent greenhouse gas.
But, following the United States’ presidential election, many observers fear that international efforts to combat climate change – such as the Paris accord and the Sustainable Development Goals…could be derailed. During his campaign, President-elect Donald Trump – who in 2012 took to Twitter to declare that climate change is a Chinese-created hoax – said that he would walk away from the Paris agreement. But, in a post-election interview with the New York Times, Trump said that he had an “open mind” about the Paris agreement, implying that he is now backing away from his previous statements.
❝ Given Trump’s belief that “unpredictability” is a virtue, no one can know for certain what he will do when he takes office in January…but, if Trump chooses to abandon the US government’s climate-related commitments, the rest of the world will have to find a way forward on its own…
Prospective solutions to the Trumpocene Age are useful, creative and probably necessary. Adding in his fellow Republican gangbangers brings additional intellectual dishonesty to his table.
❝ …bumptious unilateralism is a double-edge sword. As Stiglitz warns, if Trump does not pursue climate-friendly policies, other countries might “start imposing tariffs against US products made in ways that violate global climate-change rules.” And beyond the international community, “the market itself will be Trump’s biggest constraint,” says New York University economist Nouriel Roubini: “If he tries to pursue radical populist policies, the response will be swift and punishing: stocks will plummet, the dollar will fall, investors will flee to US Treasury bonds, gold prices will spike, and so forth.”…
❝ Similarly, even if Trump reneges on US commitments, and does not implement national policies to reduce emissions, such a move would kill the Paris agreement only if other countries decided to do the same, which is not likely to happen. For large emerging countries such as China and India, “the relatively rapid transition away from fossil fuels,” argues…John Mathews, “is driven not so much by concerns about climate change as by the economic benefits renewable energy sources are perceived as conveying.”
Thus, with China and India in the lead, the rest of the world will most likely continue to pursue carbon-emissions reductions, regardless of US participation, simply because it is profitable to do so. The US, meanwhile, will suffer more than the climate does if it does not move toward a green economy.
RTFA for a great deal more analysis, understanding and alternatives from Bo Lidegaard and more. Poisonally, I expect little sound economic sense within the framework of Trumponomics. Most is perfectly satisfactory to the Republican crew from Reaganites to Tea Party Trumpkins. They couldn’t care less about jobs, education or healthcare. They lie the nation they profess to love – dedicate all to the greed they love more than life.
Completed in 1974, Monroe Power Plant will be the last one standing in 2030
❝ All year, Donald Trump has been promising to rescue the US coal industry by repealing various Obama-era pollution rules and ending the “war on coal.” And all year, analysts have pointed out that he probably can’t stop the collapse of the coal industry — since coal’s woes go far beyond the Environmental Protection Agency.
But if you want a perfect example of why Trump will struggle to bring back coal, just look at Michigan.
❝ Last weekend, the CEO of Michigan’s largest electric utility reiterated that his company is still planning to retire eight of its nine remaining coal plants by 2030 — whether or not Trump tries to repeal President Obama’s climate policies…
Gerry Anderson’s reasoning was simple. Coal is no longer the economic choice for generating electricity, due to relentless competition from cheaper (and cleaner) natural gas and wind power. In Michigan, a new coal plant costs $133 per megawatt hour. A natural gas plant costs half that. Even wind contracts now cost about $74.52 per megawatt hour, after federal tax credits. “I don’t know anybody in the country who would build another coal plant,” Anderson said.
❝ What’s more, Anderson added, surveys show that most of Michigan’s consumers want to add more renewables “if it can be done at reasonable cost.”
❝ It’s not just Michigan. This dynamic is playing out all over the country, as coal plant after coal plant succumbs to competition from cheap natural gas and wind. Over at Politico, Michael Grunwald estimates that US power plants are now on track to emit 27 percent less carbon dioxide in 2016 than they did in 2005.
What’s remarkable is that this is all happening before Obama’s Clean Power Plan even takes effect. That rule, which is still tied up in court, aimed for a 30 percent cut below 2005 levels by 2030. We’re almost there already. So it’s clear that scrapping the CPP, as Trump has pledged, won’t help coal power make a huge comeback.
Not that reason, efficiency and cost mean much to Republicans and other Trump Chumps. The vicarious thrill of turning back regulations designed to make life healthier for most folks is almost as visceral a pleasure as, say, machine-gunning a basket of kittens.