Another promise kept

Right after Trump kept his promise to cut the top personal income tax rate from 43.4% to 25%, another promise was also kept:

President Trump is celebrating Republicans’ passage of the tax overhaul bill as a two-fer: On Wednesday, in addition to tax cuts, he checked off his promise to repeal Obamacare, pointing to a provision in the bill to end the penalty on Americans who don’t get health insurance.

“We have essentially repealed Obamacare,” Trump told reporters during a Cabinet meeting at the White House.

I’m hoping that in a similar fashion Trump also keeps his promise to build the wall, end trade agreements, construct infrastructure and expel Dreamers.


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25 Responses to “Another promise kept”

  1. Gravatar of H_WASSHOI H_WASSHOI
    21. December 2017 at 05:56

    Is there any promise to nuke out NK?

  2. Gravatar of Brian Donohue Brian Donohue
    21. December 2017 at 06:13

    My wife summed up Trump thusly: his bark is worse than his bite.

    Politicians say a lot of things to get elected. This is an unreliable guide to what will happen if they attain office. Many people told you this over and over, but you didn’t want to hear it.

    I don’t like Trump, I voted for Hillary, but I really don’t like the hair on fire reaction of so many people to Trump. You have been part of that. Compared to your heroic contributions to our understanding of monetary economics, it paints a poor picture.

    Sneering at Trump amounts to sneering at the 60 million people who voted for Trump. It’s an excellent recipe for more Trump.

  3. Gravatar of Magaman Magaman
    21. December 2017 at 07:06

    @Brian,

    And to think Scott could’ve been the next Fed Chairman… Scott you should read that book by Dale Carnegie, “how to win friends and influence people”, hint it’s not by writing unhinged critical blog posts about them.

    We could’ve had Trump and Market Monetarism.

  4. Gravatar of hwaf hwaf
    21. December 2017 at 07:42

    If less than a million people who were brought here as kids (the dreamers) keep Scott up at night, then macro is even more complicated than I thought.

  5. Gravatar of Justin D Justin D
    21. December 2017 at 09:05

    Ultimately, I don’t Trump’s achievements are without blemish, but they are an improvement to the status quo, or at least they can help provide a path forward.

    With regards to taxes, increasing the standard deduction and capping itemization will make it politically easier in the future for another round of tax reform to lower the rate and broaden the base, as there will be fewer beneficiaries of itemizing and their benefits from itemization will be lower. The recent wave of news reports of corporations sharply increasing their minimum pay or paying bonuses in the wake of the tax cut provide a tangible example of the benefits of business tax cuts in a way that abstract arguments about tax incidence do not.

    The loss of the individual mandate should help lead to substantial health care reform before too long as the individual market is unlikely to be stable without it. There is little risk of single payer as even California and Vermont can’t successfully enact it.

    The Trump Administration has also rolled back various regulations, put Neil Gorsuch on the Supreme Court (along with many other conservative justices on lower courts). ISIS has been substantially weakened, which some observers credit to Trump for loosening the rules of engagement, allowing commanders to make more of the day-to-day decisions. He hasn’t solved North Korea, but there’s not really much that can be done, and so far he’s managed to avoid starting a horrific war on the peninsula.

    Trump has more difficult views on immigration and trade, but there he’s been relatively ineffectual. There is no wall and there hasn’t been any significant disruption in trade. Arguably, his lack of interest in (and/or knowledge of) policy details and rhetoric are his only serious problems. On the plus side, the former tends to mean that policy gets outsourced to others, usually for the better. In terms of actual results, I’d probably give him a B or B-.

  6. Gravatar of ssumner ssumner
    21. December 2017 at 09:07

    Brian, Trump has been far worse than I imagined. Every single day he says something that makes the rest of the world think we’ve become a banana republic. I have no idea what you are talking about when you say people told me that he would not be as bad as I thought. He’s been far worse. Have you not been paying attention over the past 12 months?

    As far as policy, I said I expected almost nothing out of Trump, so I’m not surprised that he has not done all sorts of horrible things like build the wall. I was right.

    Magaman, I’m going to assume you are joking, the alternative too too horrible to contemplate. I’m as likely to be picked to be Pope as Fed chair, and if some moronic president did pick me, I’d turn it down.

    hwaf, It’s called sarcasm.

  7. Gravatar of ssumner ssumner
    21. December 2017 at 09:09

    Justin, For every policy plus, there’s been a minus that you conveniently overlook. What about his massively costly new regs in the energy industry, which will cost consumers tens of billions? What about the budget deficit?

  8. Gravatar of Robert Zimmerman Robert Zimmerman
    21. December 2017 at 09:38

    Hey Scott,

    Been following your blog for quite some time. Thoroughly enjoyable and informative. Apologies if this is in poor taste, but I wanted your opinion on Saudi Arabia’s citizen’s account, which is similar to helicopter money.

    Saudi is set to further ease subsidies on utilities and implement a 5% VAT, the latter of which is fully borne by the consumer. The citizen’s account is money deposited to low to middle-income households as a means to slightly offset the costs of the upcoming reforms.

    Saudi Arabia has seen persistent deflation over the last year, analysts have been attributing it to a base effect due to the first hike in energy prices last year but I don’t think that’s the likely reason. They argue that since energy prices increased last year, it’s intuitive that the index will drop this year, that’s shoddy analysis in my opinion. The hike should cause a new norm in the price level, any downward impact would be driven by other factors, namely reduced consumption.

    My question is helicopter money should be inflationary, but is my line of thinking correct that VAT and subsidy removal would remove any inflationary impact of the “citizen’s account”.

  9. Gravatar of Joe Joe
    21. December 2017 at 09:54

    So you wouldn’t want to be Trump’s Hjalmar Schacht? I mean, there might be a lot of blood you’d have to obsessively clean from your hands, but it’d be an interesting job :-)

  10. Gravatar of Massimo Heitor Massimo Heitor
    21. December 2017 at 10:30

    Obamacare hasn’t been repealed. Trump is obviously using rhetoric to exaggerate accomplishment.

    If Trump can’t build the wall or change immigration policy, it’s simply because of normal checks and balances of power; many other powerful interests are quite determined to fight Trump on immigration in particular. It will not be due to some idiosyncrasies of Trump himself or dishonesty on the part of Trump.

    The pre-Trump Republican party knew their voter base wanted less immigration and was fearful of losing their identity and being demographically replaced with a different people and culture. The GOP party knew this and pushed the exact opposite policy agenda, and shamed or deceived their own voters for wanting the opposite. And while many immigration proponents proclaim some moral or economic motivation, the GOP was motivated by simple political power, which I don’t blame them for, but am not terribly sympathetic with on moral or noble terms.

    I’m reading Samuel Huntington’s famous book, Clash of Civilizations… Huntington and many others make intelligent arguments against the western form of immigration. People like Sumner and Caplan or deliberately evading those good arguments.

    One simple question: if people, across the globe, and across history, passionately care about their identity groupings such as ethnicity/religion/nationality/language/civilization and vote according to those groups, giving voting rights to large foreign demographics seems like a losing proposition to the host population and they have rational reason for not wanting to to it.

  11. Gravatar of Randomize Randomize
    21. December 2017 at 11:20

    Justin D.,

    The tax bill has a couple positives such as, in addition to the one you mentioned, the territorial system. It also, however, has multiple turds floating around the punchbowl. Why rack up additional deficit during economic good times when the fiscal multiplier is likely zero? Why should pass-through business owners pay lower rates than regular sole proprietors and us rubes who earn wages? With the pay/go laws, is it really okay to fund cuts in the estate tax with Medicare cuts? Thank God those billionaire heirs will be able to afford 40% more hookers at their poolsides while Grandma chooses between hamburger and diabetes medication.

    The GOP could have made a decent bill but instead they chose to poison it with their typical pandering to their wealthy donors.

  12. Gravatar of Benny Lava Benny Lava
    21. December 2017 at 12:19

    Brian,

    That is an interesting thesis. Be nicer to Trump voters otherwise they will vote to reelect him? Is that really what motivate voters? Like if everyone was nicer to Trump voters they would have voted for Hillary?

  13. Gravatar of E. Harding E. Harding
    21. December 2017 at 13:24

    Sad, but true. Now he’s approved the sale of sniper rifles to Ukraine. He’s better than anything the Democrats are offering, but by any objective standard, President Ted Cruz isn’t very good.

  14. Gravatar of E. Harding E. Harding
    21. December 2017 at 13:29

    BTW President Cruz has also commuted the sentence of a big-league illegal immigrant-employing Jew. He’s fundamentally unserious about immigration matters.

  15. Gravatar of Brian Donohue Brian Donohue
    21. December 2017 at 13:35

    Benny,

    I’m not talking about niceness, just basic civility.

    It’s ok for a nobody like you to sneer. Sneer away. Lots of goofs sneered at Obama.

    When it comes from not-quite nobodies like Scott, or definite somebodies like Krugman (premier sneerer), it’s not a good look and counterproductive.

    Here’s the premier sneerer from BEFORE the election:

    “What Republican voters wanted, instead, were candidates who channeled their anger and fear, who demonized nonwhites and played into dark conspiracy theories.”

    Huge fail on the Ideological Turing Test there. But imagine a NYT article from October 2008 casting such aspersions on Democratic voters.

    But keep sneering at half the country, Paul. Seems like a winning strategy.

    P.S. the column from which this came was written assuming Hillary would win- it was a premature victory lap of sneering. Given how things unfolded, the irony is delicious. Give it a read:

    https://www.nytimes.com/2016/10/24/opinion/its-trumps-party.html

  16. Gravatar of Steve F Steve F
    21. December 2017 at 13:52

    I’m an avid reader of this blog and Scott has taught me more than any other economist outside of Milton Friedman (including my professors). I hold a contrary position on some of the stuff that Scott moralizes as horrible or evil. And the contrary position might be correct. The emotional and judgmental language is not a good look

  17. Gravatar of msgkings msgkings
    21. December 2017 at 14:51

    @Brian: are you saying if the other side had sneered less Trump wouldn’t have won? Don’t both sides’ somebodies sneer?

    It’s just tribal games at this point. Team Red vs Team Blue. Better candidates create more turnout for their side and they win. Trump was way more fun for his team than Hillary for hers.

  18. Gravatar of Jeff Jeff
    21. December 2017 at 19:23

    When the constitutionality of the Obamacare mandate was being argued at the Supreme Court, it seemed like there was universal agreement that the mandate was the heart of Obamacare. The system would collapse without it, we heard again and again. Conservatives were sure that if the Court ruled against it, Obamacare was finished. Liberals pretty much said the same thing.

    So now the mandate is history, but Scott says it’s no big deal. Why then was it such a big deal before?

  19. Gravatar of bill bill
    21. December 2017 at 21:43

    Trump is horrible.

    https://youtu.be/PK_7spws64o

    Stalin would have had Pence shot for being such an obvious sycophant. Trump just believes it.

  20. Gravatar of Brian Donohue Brian Donohue
    22. December 2017 at 07:06

    @msg, there is no symmetry here. What is the right-of-center NYT? Who is the right-wing Krugman?

    I’m speaking broadly of The Establishment: mainstream media, academia, deep state GOP enthusiasts like Bill Kristol. They find Trump aesthetically repulsive and cannot help but habitually sneer. He’s a “toddler”, an “ignorant oaf”- just imagine if Obama was routinely pilloried in this way – not just by right-wing goofs like Hannity but by The Establishment.

    Trump is pretty well hemmed in- isn’t that enough? Must we pile on the guy every single day?

    Trump is just a symptom here of something that has been going on for a while in the West, e.g. the UK votes for Brexit, but The UK Establishment is doing its damndest to subvert the decision.

    The irony of Krugman, anticipating a win by Hillary, pre-emptively condemning GOP obstructionism is just too hilarious given the events of the past year.

    How can Trump and Brexit voters not look at this and decide the sneering Establishment’s paeans to democracy only apply when the rubes fall in line?

    Yes, Establishment contempt is obviously part of the story here. Keep it up, and they’ll have plenty more opportunities to sneer.

  21. Gravatar of ssumner ssumner
    22. December 2017 at 07:57

    Robert, Is this citizen’s account fiscal or monetary policy?

    Joe, I would not want to be Fed chair under any President; it has absolutely nothing to do with Trump one way or another.

    Massimo, But Trump promised us that he would not be restrained by the normal “checks and balances”. He was not going to be a wimp, like Rubio or Bush. What happened to the Superman?

    Harding, It seems that you are especially bothered by that person being a Jew. (Why am I not surprised?)

    Brian, I hope you realize that I’m not an ideologue like Krugman; I “sneer” at both sides, or indeed any person who says crazy things. Sorry, but when a candidate claims that he will pay off the entire national debt in 8 years, while slashing taxes by $7 trillion, and massively boosting defense spending, and boosting infrastructure spending, and not touching entitlements, I sneer. What do you do? Do you think that’s a claim where reasonable people can disagree?

    Also, unlike Krugman I never predicted that Trump would be bad for the economy. Which pundit looks more prescient today?

    Jeff, Oh really? Where did I say it was no big deal?

  22. Gravatar of msgkings msgkings
    22. December 2017 at 09:21

    @Brian: the right wing NYT is the WSJ (editorial pages). The right wing Krugmans are legion, mainly on Fox. Hannity is the biggest. Those guys sneer with the best of them, and they gave it to Obama just about as much as the other side gives it to Trump. Trump gets more heat because he’s 1000x worse than Obama.

    I agree the coastal types should and will take a different tack but facts are facts, they are smarter and more productive people, and there’s nothing wrong with that.

    I also agree Trump is not nearly as bad as the TDS people are wailing about, he’s a hemmed in clown as you say. He won’t destroy the nation any more than Obama, Bush, or Clinton did. But he’s awful and deserves every bit of the attacks he gets. And the people who love him? So do they.

  23. Gravatar of Brian Donohue Brian Donohue
    22. December 2017 at 09:29

    What do I do? Roll my eyes and heavily discount such silliness. Same goes for Bernie Sanders’ pie in the sky.

    FDR ran on balancing the budget. Bush ran on “nation-building is bad”. Obama ran on “hope and change”. It’s kabuki.

  24. Gravatar of Justin D Justin D
    22. December 2017 at 09:50

    Scott, Randomize,

    I admit there are problems, both in terms of policy and rhetoric, but by and large the Trump Administration seems (for the most part) to be governing like typical Republican administration, and that is the standard by which I am judging his performance.

    The tax bill isn’t what I would have chosen (probably something closer to the Hall Rabushka flat tax or Bradford X tax) but looking at the silver lining it does weaken political constituencies defending this or that particular deduction or credit. Hopefully next time, it will be possible to offer a tax which truly doesn’t have any special interest deductions, but a pure consumption tax with a carve out to ensure the people who can’t really afford it don’t have to pay much or anything (maybe even a negative consumption tax at very low levels of consumption). I also agree that with unemployment at 4.1 percent, the budget should be balanced or in surplus at the current time. I’m fine with getting rid of the Estate tax, per Scott’s comments in the past about the negative economic impact of taxing capital.

    I don’t care for Medicare or government health insurance programs. If we consider the cost of direct care provided (Medicare, Medicaid, VA, insurance for government employees) and indirectly (health insurance being exempt from taxes), then the government already provides for about two-thirds of total health care costs in the United States. Let’s say that’s approximately $6,700 in 2017. Assume that NGDP grows 3.5%/yr and population growth averages 0.6%/yr, and that health care only grows at NGDP per capita, a child born today and dying in 2096 at age 79 would have just over $2 million spent on him by the government for health care, or $778,000 in real terms assuming 1.5% RGDP growth.

    I’d make ERs publicly funded at the local level, provide for a catastrophic insurance capped at 0.5% of GDP, a program to help with long term care, but otherwise create very large health spending accounts with the remaining balances. In back of the envelope numbers, if we take about 12% of GDP to be public health care, assign 0.5% to catastrophic insurance, 0.4% to public ERs, 1.5% to long term care financing assistance, and 9.6% of GDP to the spending accounts in terms of likely annual spending power.

  25. Gravatar of Christian List Christian List
    25. December 2017 at 20:58

    @Brian Donohue

    Your comments are spot on.

    And your link to that Krugman column is just pure gold. I stopped reading Krugman long time ago, but that column is just wow, even for Krugman.

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