Trump's Economic Plan

Politics & Elections
1

Trump’s ‘Press Conferences’ have been pushing his proposed economic plans to save the country from the ravages of inflation. It seems his plan consists of

  • No income taxes on tips and Social Security (SS)
  • Deportation of so-called illegal migrants (like you’ve never seen)
  • Put The Fed (The Federal Reserve Bank) under direct control of the President
  • Have all his cabinet members do everything they can in their capacity to lower consumer prices

Now, the first one is simply going to raise the deficit. The people who need help don’t pay much income tax, so it won’t help them. Those who earn enough to make a difference, don’t need help. But a larger deficit lowers the strength of the dollar, leading to inflation.

The deportation of migrants creates a labor shortage at the bottom of the labor pool. Those jobs have to be done, so the only way to fix that is to raise wages, leading to inflation. Besides, I thought the Right Wingers were saying all these migrants were registering to vote. If true (or even possible), it seems the worst thing you could do is threaten them with deportation.

Putting the Fed under Executive control has been on the Conservative wish list all my life. I’m retired now. I lived through (in fact joined the labor force) the inflationary '70s. While some Fed Chairmen have been better than others, making the position de facto political is a recipe for disaster, which is why the Conservatives haven’t been able to get their wish for over 70 years.

Finally, telling a bunch of yes-men to get prices down no matter what is also not going to be good for the economy. If they succeed in lowering prices by fiat, expect shortages, need for more regulation, trade disruptions, and, predictably, runaway inflation. This is just Trump telling his toadies to ‘DO IT’ and expecting it to get done.

I realize that Economics is boring and dull. Harris can’t come out and say, “The Economy is doing great!” That would be disastrous, which is what Trump’s goading is trying to get her to do. But, things are getting better and the economy seems to be under control, so I’d think the worst thing to do would be to mess around with stop-gap and feel-good measures that are likely to do more harm than good.

Does Trump have anything I haven’t mentioned? Do his ‘Policies’ toward the economy make any sense?

2

He’ll have the details on all this out in two weeks.

The Republicans have a history of beating the “economy” drum with some success. In the 90s they convinced many voters the economy was in terrible shape, never mind the massive Clinton-era budget surplus. Bush was elected and by the time he was done we were back in deficit territory. They keep flogging the notion that Republicans are stronger on the economy, and it just sticks, regardless of facts. They’re trotting it out again now.

3

As usual, the plan attacks Social Security, the environment, and minorities.

As I understand it, if you earn enough to pay tax on SS, that portion of your tax goes into the SS Trust Fund. Take away those funds, then SS runs out of money sooner.

Deportation of “illegals” is just a nice way of saying “fuck over those who don’t look like me”. The lack of labor would lead to inflation.

Putting the Fed under the thumb of the president is a loser. You can’t make interest rates subject to the whim of a politician. Rates would never rise, even when they should.

Doing all they can to lower consumer prices is code for gutting consumer protection and environmental regulations as well as kneecapping unions.

In other words, more mush from the wimp.

4

If you have nine minutes to spare for some giggles, here are some excerpts from Trump’s recent address on economics issues. He’d been getting flak from his advisors and felt it was time for an intellectual speech.

Inflation is a big issue. At the 5:04 mark Trump gives a clear hands-on demonstration of inflation.

5

Is there a difference between those two links?

6

The biggest issue with his “plan” is he doesn’t understand what inflation is. Inflation is currently low. He’s pretending he can get prices back to where they were before the past bout of high inflation. He can’t and trying to will crash the economy. Or maybe he does understand but knows some people think “inflation” and “prices are higher than I remember them being years ago” are the same thing.

7

This would be a total disaster and would end up with the US going down the path of Venezuela and countries that have experienced hyperinflation. Here’s a gift link to a Krugman article explaining what a disaster that would be:

https://www.nytimes.com/2024/08/13/opinion/federal-reserve-politics-independent.html?unlocked_article_code=1.DU4.8tm5.4pm_Ye8nc9iQ&smid=url-share

All of this is fantasyland, anyway – Trump doesn’t know the first thing about economics and doesn’t have the attention span to pass anything. His economic plan will be whatever the Heritage Foundation wants it to be, just like his tax law was. He’s just spewing what he thinks the people he’s talking to want to hear.

8

and something about Tic-Tacs.

9

Starting more trade wars with poorly thought out tariffs.

10

I don’t think this is correct, but maybe you have a cite for this?

Right now, your SS benefits are taxable if:

1/2 of your SS benefits, plus your AGI, plus your nontaxable interest, is greater than $25k ($32k if married). (This is called combined income.)

If your income exceeds this threshold then either 50% or 80% of your SS benefits are taxable, depending on your combined income.

Raising the combined income threshold to perhaps $50k or $75k would help a lot of lower-income folks. Combining that with making 100% of the SS benefits taxable if you’re above the threshold would probably offset the deficit hit. This would make sense, IMO.

Removing the tax on all SS benefits would be a huge deficit hit.

11

Deficits only matter when there’s a Democrat in the WH.

Since social security taxes are payroll taxes, it would doubt that income taxes on SS go to the SS fund, but I don’t know for sure. SS is not payroll.

12

The straight dope:

August 8 Mar-a-Lago, FL press conference:

https://www.c-span.org/video/?537632-1/president-trump-speaks-press-mar-lago

https://www.rev.com/blog/transcripts/trump-holds-news-conference-at-mar-a-lago

August 14 Asheville, NC rally:

https://www.c-span.org/video/?537693-1/donald-trump-campaigns-asheville-north-carolina

https://www.rev.com/blog/transcripts/trump-rally-in-north-carolina

August 15 Bedminster, NJ press conference:

https://www.c-span.org/video/?537735-1/fmr-pres-trump-holds-news-conference-jersey-golf-club

~Max

13

To bring down people’s rent costs “drill, drill, drill, for oil because energy costs are driving inflation”.

14

You could be correct but I thought part of the rationale for taxing SS benefits was that money raised by this would go to the SS trust fund. Looking in vain for a cite.

15

It seems to me that ending taxes on Social Security would feed inflation in another way as well, by increasing the money supply, which is the definition of inflation.

16

Trump on Social Security in his own words

Social Security

Mar-a-Lago:

A: I am going to leave Social Security. I’m not raising the years. I’m not raising the age. I will be saving Social Security and I’m going to work it out that there’s no tax on Social Security for seniors.

[…]

Q: Okay. Regarding Social Security taxes for seniors, which you talk about a lot, experts say that the policy could increase the deficit by 1.6 trillion. So how would it work?

A: We have so many ways of making money in this country, we’re not going to affect our Social Security. We’re not changing it, and I proved that over four years and we’re going to do it… It’s very unfair to people. They spend their life and they’re great citizens and they pay in. We’re not going to charge tax to Social Security, the seniors. We’re not going to do it. We’re not going to charge. And also tax… I say the two things: We’re going to have no tax on seniors, Social Security, and we’re going to have no tax on tips. Very simple. And we are a country that has so many different ways to make money. We have under our feet more liquid gold, I call it oil and gas, than any country in the world. Much more than Saudi Arabia, much more than Russia. We have so many different ways we can make money, we’re not going to hurt our seniors with Social Security and we’re not going to charge them tax, okay?

Asheville:

To help seniors on fixed incomes who are suffering the ravages of inflation, there will be no tax on Social Security. We’re going to stop it. No tax on Social Security. This cruel double taxation of Social Security benefits, and this has been talked about for a long time.

Bedford:

The other thing, no tax on social security. We’re not gonna have seniors who have been decimated by inflation pay tax on social security. […] We’re gonna make sure the social security is not gonna be increased, in terms of years, where people have to wait much longer, and they - we have an obligation to take care of these people. And just so you know, I didn’t do it [raise the age for Social Security] in four years, I never even thought about doing it in four years.

As you can see Trump was asked point blank how he will deal with his Social Security policy raising the deficit, and his answer is that he will make up the money in other areas, particularly drilling oil.

~Max

17

Oil drilling is a common meme in these discussions. In this ad, put out by an oil lobbying group, it’s suggested California’s (Liberal) energy policies are hurting people, and that drilling for more oil will alleviate things.

18

Tax on up to 50% of benefits goes to social security, the rest (if more than 50% of benefit is taxed) goes to Medicare part A I believe. The rationale is that social security is essentially a retirement plan. It’s true that employee taxable income is calculated before the social security payment is taken out of each paycheck. But only half of social security comes from the employee, the other half is paid by the employer and they do deduct from taxable income. So its sort of a hybrid between a traditional retirement account and a Roth, so far as the rationale for taxing withdrawals goes.

~Max

19

The US is producing more oil than it ever did when Trump was president. It topped out at 13.0 mmb/d in Nov 2020. Nine of the last ten months have been higher than that (January was low.) Unless something weird happens, the total amount of oil produced under Biden will exceed that produced under Trump in a few weeks. We won’t find out until a few months later because it takes a while for EIA.gov to post their data.

There are many reasons for limiting immigration, but kicking people out who work and spend money is not going to help the economy.

20

Stop confusing matters with facts, man! All those illegals are stealing ‘black jobs’ - Trump said it himself a couple weeks ago, so it must be true!