Trump’s Magical Thinking
When Obama’s economists (from Goldman and Harvard) said that something under 3% was the maximum SUSTAINABLE increase per year in GDP, Trump and his “economists” (mainly from Fox News) said nope. We could cut taxes AND pay for the rise in spending by sustained growth of 4 to 5%. So much for magical thinking!
Meanwhile, total compensation’s share of GDP has declined by 4.5 
percentage points from 1970 to 2016. This means the share of the economy’s output going to capital increased by an equivalent amount during that period.
So the “magic” is that Trump has taken out a permanent loan of 1 trillion a year, with the interest to be paid by the taxpayers, and distributed that money to the very wealthy who do not pay taxes because the US does not tax increases in wealth.
Magic works for the wealthy!
Tags: wealthism
Posted 15 Mar 2020 by theaveeditor
in Misc.
Republicans have claimed since Reagan’s time that tax cuts pay for themselves by boosting tax revenues via increased economic growth. This is to economics what perpetual motion is to physics — the illogical argument that output can exceed input, in effect creating something from nothing. How many times does this nonsense have to be disproved? It’s frustrating how gullible and badly informed people on the right are. David Stockman, a conservative and the architect of Reagan’s “supply side” policies, called it “voodoo economics.” That’s exactly what it is. But Trump’s followers believe in magic. Good luck with that. Trouble is, the rest of us are victimized by this magical thinking when voters elect Republicans who turn it into official government policy.