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Refuting Trump's Platform- Megapost (ontheissues.org)

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[–]flyingdragon8 160ポイント161ポイント  (12子コメント)

yea but he's super high energy. checkmate losers

[–]phill2mj 49ポイント50ポイント  (0子コメント)

Nimble Navigator detected!!!!

[–]mjhmjh 22ポイント23ポイント  (0子コメント)

He also called Clinton a bitch. Can't top that.

[–]prillin101Fiat currency has a 27 year lifespan[S] 62ポイント63ポイント  (3子コメント)

you got me there, i can't defeat that.

[–]Folksigr 42ポイント43ポイント  (1子コメント)

ADMONISHED

[–]WalrusWarlord 43ポイント44ポイント  (0子コメント)

CUCKS STUMPED

[–]DrSandbagsSurgically-Augmented Dickey-Fuller 15ポイント16ポイント  (0子コメント)

You can't stump the Trump!

[–]CompactedConscience 13ポイント14ポイント  (1子コメント)

You know what else was high energy? The Death Star, presumably.

[–]DrSandbagsSurgically-Augmented Dickey-Fuller 10ポイント11ポイント  (0子コメント)

The wall just got 10 feet higher and the Death Star upgraded to a Starkiller.

[–]Ludendorff 23ポイント24ポイント  (2子コメント)

Only candidate willing to predict riots. Only candidate willing to cause them, too.

[–]flyingdragon8 42ポイント43ポイント  (0子コメント)

Only candidate with an adequately sized penis despite having small hands. What a guy.

[–]Donk_Quixote 3ポイント4ポイント  (0子コメント)

He is the one causing Bernie supporters to riot. Makes sense.

[–]OMG_TRIGGER_WARNING 4ポイント5ポイント  (0子コメント)

He knows a lot of words and has a big brain too.

[–]prillin101Fiat currency has a 27 year lifespan[S] 255ポイント256ポイント  (59子コメント)

The opinions I list Trump as having in this R1 come from here and his website, and I only use quotes from 2015 as he changes his opinions a lot based off votes.

I was going to write a lengthy introduction, but I decided not to. Instead I'm just going to list each position and then refute it- with my main tool being the numerous studies proving his ideas dead wrong.

Trump's Tax Plan and the Laffer Curve

Cut taxes by $10T but don't increase deficit. (Oct 2015)

Straight from his website

Under Trump's plan, indiviuals earning below $25,000 or families filing jointly earning under $50,000 would owe zero tax, and the tax code would be simplified into 4 brackets (0%, 10%, 20%, or 25%).

Table:

Income Tax Rate Single Filers Family Filers Heads of Households
0% Up to $25,000 Up to $50,000 Up to $37,500
10% $25,001 to $50,000 $50,001 to $100,000 $37,501 to $75,000
20% $50,001 to $150,000 $100,001 to $300,000 $75,001 to $225,000
25% $150,001 and up $300,001 and up $225,001 and up

The median US income is around $51,000, most Americans will have the bulk of their taxes levied at the tax rates of the bottom two (0% and 10%).

This is a massive drop from where it currently is, and the growth effects from the massive tax cuts would need to be enormous (Which Trump claims them to be). The question is, however, does his claim of growth hold up empirically?

It does not. Trump is suggesting that we levy tax rates way past the revenue optimal tax rate (Laffer Curve), but this is simply incorrect. We are way past the point where we can lower income taxes and gain revenue instead of losing it. It would be one thing if Trump claimed the tax cuts would spur the economy, but did not claim they were on the correct side of the Laffer Curve, but he did not. He insists that there can be tax cuts that are simultaneously growth-promoting and revenue-positive, but that is incorrect. The Tax Foundation finds that Trump's tax plan in specific would cost an estimated $9.5 trillion dollars over 10 years, and even its dynamic model suggests there would be a massive deficit remaining (I say "even" because dynamic models are notoriously imprecise and generally are incorrect, static models should be relied on).

To summarize, Trump claims that his massive tax cuts will generate so much growth that they will pay for themselves, however most economists and empirics disagree.

Cutting the Capital Gains Tax

First Quote

This sub in general seems to follow the conventional wisdom that the optimal tax rate for capital gains is zero, but I don't think that is true. Unlike the corporation tax, the empirical evidence of the 0% capital gains rate is not as strong as it was in the 90's. The infamous Piketty 2012, a 2009 JEP study, and a Saez study give contradicting results to the conventional wisdom popularized in the 90's, leaving it controversial in my eyes.

Immigration

Ship millions back to Mexico, like Eisenhower did. (Nov 2015)

Building a wall will save money because it stops bad dudes. (Jul 2015)

Mexican government is sending criminals across the border. (Aug 2015)

Half of the undocumented residents in America are criminals. (Jun 2015)

We must stop illegal immigration; it hurts us economically. (Nov 2015)

Immigration seems to be one of the few cases of American exceptionalism. In Europe, immigrants generally commit more crime and in some nations are not net positive economically (Sweden, for example, but in Sweden's case it's mostly because of backwards government incentives), while in the US immigrants commit less crime than natives and do not have the same labour market issues immigrants to Europe have.

Economically speaking, the evidence for/against immigration is a very mixed pot. Studies are all saying very different things and the literature is controversial, however a narrative can be pieced together. For high-skilled immigrants and members of the H1B program, the evidence seems to be strongly in favour of net-positive economic effects brought by them. For low-skilled immigrants, the literature is very very mixed, and nothing is as certain as it may be with skilled immigrants for example. Evidence leans towards the idea that low-skilled immigrants are a net benefit to the average American, but directly lower wages for low-skilled Americans- however it is not a very big lean. Giovanie Peri's working paper, for example, finds that H1B Visa workers and STEM immigrants drive wages up for all Americans, while a Borjas study with around 1200 cites (holy shit) finds that low-skill Mexican immigrants are hurt wages. Rather than expel immigrants, a CBO paper finds that allowing a path to citizenship for illegals would actually raise GDP by 5.9% and lower the deficit by $859 billion over 20 years. Furthermore, A meta-study from Harvard finds that "“Most empirical studies estimate the fiscal impacts of immigration to be very small… On average, immigrants appear to have a minor positive net fiscal effect for host countries.”" However, another Borjas study with 3006 cites (that's a lot of cites), finds as Mexican immigration increases the average US wage decreases massively. But, Card responded to Borjas with a proper critique and Ottovonia came out with a hard-hitting study and found that low-skill AND high skill immigrants increase average native wages. That's not to say Borjas has been completly refuted, he still is a giant in immigration econ and has another study supporting his conclusion.

From this link-salad of studies you can see that the low-skill immigrant question is highly controversial among economists but there seems to be a narrative coalescing- that low-skill immigrants may not hurt the economy that much (Or, in some cases, expand it).

PART TWO BELOW, USED TOO MANY LINKS AND IT TOOK ALL THE CHARACTERS

[–]prillin101Fiat currency has a 27 year lifespan[S] 142ポイント143ポイント  (25子コメント)

Government Debt

One-time 14% tax on wealthy to pay down national debt. (Jun 2015)

If debt reaches $24T, that's the point of no return.

Ignoring the fact that a wealth tax would likely cause one of the largest economy-wide devaluation of assets ever witnessed as the government or people (depending on who is the one responsible for the selling) attempts to all sell their wealth at the same exact time, the government debt is currently a non-issue.

To quote /u/Integralds:

  1. So there's demand for US debt. But there's also demand for corporate debt (commercial paper). Google sells debt, just like the US Treasury. So what distinguishes US government debt from other kinds of in-demand debt instruments? The US government issues debt denominated in US dollars. In addition, the US government (via the Fed) is able to print US dollars.

That is, the US government issues debt denominated in a currency that it also issues. That's nontrivial, because it means that in a worst-case scenario the US government can always print currency to pay back its debts. There is no reason in principle that the US should default. Yes, paying off debt with newly-minted currency (called "monetizing the debt") likely leads to a loss of confidence, inflation, and other bad outcomes; it is a worst-case scenario, but it does matter.

  1. Caveat: #2 leads me to the recent debt ceiling/default issue. There are other things going on here. The Fed is independent of the rest of the government precisely so it doesn't print money to pay back US debt. Yes, that means #2 is less of a factor than it otherwise would be, but #2 continues to run rampant in popular accounts of "why government debt is different." So you have reason to think #2 is not the main thing going on here, regardless of what you might see in /r/politics.

  2. So the fact that the US prints debt in its own currency should be discounted due to the independence of the Fed. Why else is government debt different from commercial paper? The government is a large player in the economy and has noticeable effects on aggregate demand. Individual households and firms do not have that luxury. What that means is that, for you, interest rates are givens; for governments, interest rates are something that can vary depending on how much the government itself spends.

To speak in jargon for a second, households exist in partial equilibrium while governments exist in general equilibrium. That's the basic reason that the government is not a household and why government debt is not like household debt. When times are bad, and the government borrows in order to stimulate the economy, it's possible for output to rise and for, on net, debt/GDP to fall. (Though I don't really want to talk about stabilization policy, and especially fiscal stabilization policy, unless someone forces me to. Let's focus on longer-run issues first, they're less controversial.)

Denying Climate Change and the EPA

Cut the EPA; what they do is a disgrace. (Oct 2015)

Climate change is a hoax. (Jun 2015)

I'm not going to bother citing climate change studies it is a proven fact, so I'm going to focus on the effectiveness of the EPA and the social costs of pollution.

The best way to illustrate the social cost of pollution is an example. Imagine you live in a small agricultural town, and a few months back there was an expansion of industry in the area- a small industrial park filled with light industry. You and most of the town live just about a mile out, downstream from the industrial park. When the industrial park and the coal plant inevitably pollute the river, they're not going to be the ones paying for the costs. The murky dirty river will directly lower property value of home owners, potentially pose a threat to citizens who may use the river for various purposes via sickness and illness, or render the river unusable as a future water source for the town forcing them to extract from a more expensive area in the future.

All of these costs are not borne privately by the factory, but socially by the taxpayer or society. The social cost of carbon is just something like this except on a global scale via climate change and air pollution (Beijing Smog).

The social cost of carbon is high, some sort of government action is necessary to preserve the Earth.

The EPA is also a major net-benefit to society, for example just look at their emissions trading program (Cap and Trade, which Trump opposes).

Free Trade

Take jobs back from foreign countries to lower unemployment. (Aug 2015)

20% tax on all imports (2015)

Mercantilism is one of the worst possible economic policies one could suggest. NAFTA, which Trump demonizes, was a resounding success for both Mexico and the US. Free trade is welfare improving, but complaints of free trade destroying the economy are simply overstated..

But, however, there is a legitimate complaint to free trade that Card really hit home with recently. The fact that the bottom 20% of society actually loses out from free trade, while the remaining 80% directly benefits. The poor do lose in the end from free trade because they have zero human capital and their jobs are being done in cheaper nations (China, as Card demonstrated). This does not mean that free trade is a failure however, it simply means KH compensation is required. Taxing the winners and using it to fund Trade Adjustment or further education funding in poor areas for example are easy ways around this- not ending free trade.

Unemployment is 20%

Real unemployment rate is 20%; don't believe 5.6%. (Jun 2015)

"I've seen numbers of 24 percent -- I actually saw a number of 42 percent unemployment. Forty-two percent." He continued, "5.3 percent unemployment -- that is the biggest joke there is in this country.

No, it's not.

Not going to bother making a lengthy paragraph with multiple source, it's just not.

Minimum Wage

Don't raise minimum wage; it makes us non-competitive. (Nov 2015)

Don't raise minimum wage, but create more opportunities. (Aug 2015)

Too lazy to finish the last section, someone do it then I'll edit it in. Thanks!

Edit: Someone has done it, and it's great! Rejoice! Here, for a critique on Trump's opinion of the minimum wage.

Special Thanks:

/u/t0t0t0t0t0t0 for this post.

/u/usrname42 for this post.

/u/Integralds for the supplementary text on the government debt section

/u/MoneyChurch for this post.

[–]Im_not_JB 29ポイント30ポイント  (1子コメント)

The social cost of carbon is high

I'd say citation needed, but you gave a citation. The problem is that the citation is crap. There are more fundamental problems than choosing a discount rate. All of the damage functions are simply made up, and they're just made up because there's no theoretically-defensible way to dynamically model the economy in 2065. As economists, everyone here should probably agree with this pretty easily. You even state:

dynamic models are notoriously imprecise and generally are incorrect, static models should be relied on

...and that's on a time period of ~10 years! We should be far more skeptical when the timescales are the wrong way round and the models use a dynamic model on the fast system to create a static model which they apply to the overall dynamic system far outside its domain of validity.

Disclaimer: My PhD is in dynamical systems theory from an aerospace department (there aren't any "dynamical systems departments" that I'm aware of), not an economist. Also, none of this has anything to do with whether climate change is real or man made - that's outside of my domain and I trust the climate scientists.

[–]prillin101Fiat currency has a 27 year lifespan[S] 12ポイント13ポイント  (0子コメント)

These are fair complaints. I'll edit out the source, thanks.

[–]StroodlingThe Ground Zero of the Economics World 46ポイント47ポイント  (16子コメント)

I'm going to attempt to help with the minimum wage section:

Common arguments in favor of minimum wage tend to appeal to society's (or firms') supposed obligation to workers to provide workers with a living wage, citing that a moral society would want to provide for its working poor. Leaving this aside, one could argue that the costs to government (in the form of welfare, crime prevention, etc.) outweigh the losses from a minimum wage, such that the minimum wage, even if it destroys some jobs, could be a Kaldor Hicks improvement.

However, we don't need to assume that the minimum wage represents a welfare loss at all, even if it sets a price floor. Economic models that include employment frictions or monopsonic firms can both lead to socially non-optimal wage levels in the absence of minimum wages.

For the case with monopsonic firms, the wage offered by each firm in the market includes a markup factor scaling in N number of firms, that converges to 0 as N-->∞. Low-skilled workers likely cannot search for work among firm that are reasonably approaching this limit, and it is therefore likely that the price of their labor will be marked down by the market power of firms. Setting a minimum wage helps prevent this, by ensuring that hiring decisions cannot underprice labor. Here is a cached link to Aaronson and French's 2006 paper which proposes a model of monopsonic firms which demonstrates this. (You can also just Google "Aaronson and French 2006" for the paper, but you get a pdf so I can't link it)

The second case involves the involvement of market frictions, where both unemployment and vacancies exist simultaneously within the economy. For this, we can use the Diamond-Mortensen-Pissarides Model, which uses markets with search costs to introduce search frictions. In this model, we can define 2 Bellman equations for both the firm and the worker for states of the world where vacancies exist/are filled & workers are employed/unemployed. Here, search frictions mean that filling a job results in surpluses for both workers and firms, with the total social surplus equal to the sum of the surplus for each of the firm and the worker between the employed/filled vs unemployed/vacant state of the world. If this surplus is positive, the social surplus is shared between the firm and the worker via a Nash Bargaining condition, where relative shares of the surplus accrue to either the worker or the employer. We might suspect that low-skilled workers have worse Bargaining skills/positions from which to bargain, and therefore are less likely to retain wage benefits from the surplus generated from their labor, particularly when negotiating with much larger firms. While social optimality may be maintained for any level of bargaining strength, it is reasonable to think we may want workers to retain some of this surplus. Setting a minimum wage can guarantee this occurs by place min wage between the reservation wage and the wage at which the firm is indifferent to hiring - helping workers without eliminating any jobs, even prospective future ones. A model so good Diamond, Mortenson, and Pissarides got a nobel prize for it.

Also, we can back up these models by examining a bunch of papers which show very little job loss from minimum wage hikes, such as the classic Card and Krueger 1994, or the recent Haraztosi and Lindler 2015 which lets you look at Hungary even.

[–]bernies_economist 31ポイント32ポイント  (13子コメント)

Here is a cached link to Aaronson and French's 2006 paper which proposes a model of monopsonic firms which demonstrates this.

Suppose you really buy this argument. That employers of low-skilled workers are monopsonists. That's basically franchise restaurants like Subway, McDonalds, etc and tons of other smaller coffee shops, mom / pop stores, etc. These places are everywhere, and there are a TON of employers of low-skilled labor.

And we're going to describe that as "monopsonists"? Really? Wendys that is across the street from McDonalds and next to a Subway, a coffee shop, and an Olive Garden should be modeled as if they are a single buyer of low-skilled labor?

OK, what about the "employment friction" argument. Do you know how long it took to get a new job after I was fired from Wendys? Less than a week. I walked across the street and turned in an application to a Taco joint.

Now contrast this to high skilled labor. Boeing may very well be modeled as a monopsonist. And certain defense contractors as well. But no one wants price floors for labor in high skilled markets, even though if you think a frickin franchised Wendys is a monopsonist, good lord what do you make of Boeing?

And if you get fired from Boeing, the job "friction" is 10x larger to find a comparable job than if you get fired from Wendys.

The argument that minimum wage laws are efficiency improving in cases of job friction of monopsony makes a lot of sense if you are just writing theory papers. Until you start to ask yourself whether the assumption of monopsony or job friction is actually reasonable for those the minimum wage applies to.

And never mind that even if price floors in the labor market could theoretically be efficiency increasing, there's almost zero data to actually derive what this optimal price floor is and what it is a function of (certainly different for different labor markets / regions / skill levels).

Meanwhile the cost of getting the minimum wage wrong is quite high; it's a price control after all! Get it wrong and you have all the standard deadweight loss (unemployment, less hours, dialing back on other forms of compensation) or black markets (yeah!) etc.

Why is a price control suddenly appealing in the labor market when all economists agree it sucks in every other market (gas caps, rent control, price gouging laws, etc). Yes, labor could be special, but probably if you want to address poverty or inequality, there's a lot better tools to tackle this stuff than price controls!

Why aren't we advocating for basic incomes, or wage subsidies? Seriously? Oh, because they are not politically popular?

I seriously do not understand why so many economists think price controls in the labor market should be one of the primary knobs politicians should be playing with. Like it's really easy to get it wrong and screw everything up if it's too high, but the benefits of getting it "right" (however the hell we measure that) are pretty small.

[–][deleted] 5ポイント6ポイント  (3子コメント)

Why aren't we advocating for basic incomes, or wage subsidies? Seriously? Oh, because they are not politically popular?

EITC!

[–]bernies_economist 1ポイント2ポイント  (2子コメント)

So advocate for increasing it if you want to combat poverty or inequality! That's a way better solution than price controls on labor. You sure as hell don't have to worry about disemployment if you are subsidizing labor.

[–][deleted] 2ポイント3ポイント  (1子コメント)

I agree, I was simply saying that this is an already existing option which can be expanded to combat poverty if you believe in actively combating it.

[–]bernies_economist 3ポイント4ポイント  (0子コメント)

I do; I happily advocate for use of EITC over minimum wage laws for precisely this reason. It does not remove employment opportunities, especially for teenagers and those with very low skills / productivity.

If you dislike what the market sets as the wage for low skilled workers, the government should step in and try to make up the difference between that and a living wage without distorting the market.

Obviously wage subsidies have some distortion associated with them, but it's a lot less than jacking up price controls on labor.

[–]besttrousers 9ポイント10ポイント  (2子コメント)

OK, what about the "employment friction" argument. Do you know how long it took to get a new job after I was fired from Wendys? Less than a week. I walked across the street and turned in an application to a Taco joint.

Nice anecdote.

But, seriously, look at the literature.

[–]bernies_economist 13ポイント14ポイント  (1子コメント)

If you think there is so much employment friction in the market for low-skilled labor that it justifies price controls, why aren't economists arguing for government price controls on high skilled labor like defense contractors or aerospace machinists?

There's like 2 companies in the world that manufactures airplanes, and only a handful that produce high end military grade equipment.

The job friction for this labor market is orders of magnitude higher than a dishwasher. Literally there is almost zero requirements outside of a pulse for employment in a fast food joint. Compare that with employment at a defense contractor where a huge security / clearance hurdle must be met on top of educational / skills requirement.

If you are seriously going to advocate for some regional price control on labor, why is it the same for engineers and fast food workers? You think the labor friction is the same? That "monopsony " power is the same?

The problem with current price control justification in labor markets is that the evidence is just so weak. You easily see the same friction in other markets (used cars, real estate) or hell even within the same market (high skilled labor) that you see with existing minimum wage labor.

Despite this, you don't see entire hoards of labor economists advocating for government set price controls on used cars, real estate, or aerospace engineering labor. The reason is you (should) need really strong evidence of market disfunction before you resort to government price controls. We are more likely to make the market worse by removing price as a signal, especially because price discovery is so hard to begin with.

And if your policy goal is to help poverty or inequality, there are many ways to tackle those issues that do not involve price controls in the labor market.

[–]doodcool612 2ポイント3ポイント  (0子コメント)

If you think there is so much employment friction in the market for low-skilled labor that it justifies price controls, why aren't economists arguing for government price controls on high skilled labor like defense contractors or aerospace machinists?

Specificity and practicality.

A minimum wage targets many jobs at once, but you'd have to painstakingly define a minimum wage for every high-skilled job. The minimum for a machinist is not going to be the same as the minimum for a designer.

And practically, whatever government body would set these control would have to react super fast or risk the immediate dead-weight loss. Some new technology obviates a hundred-thousand jobs? Better go through every single high-skilled job again and pray we can get the votes to change the minimum.

[–]fistkick18 1ポイント2ポイント  (0子コメント)

I love you.

[–]Seefufiat 0ポイント1ポイント  (4子コメント)

We're not advocating for UBI because the world isn't even close to requiring one. Automation is still about twenty years away from being able to cut jobs meaningfully and permanently, if not longer.

[–]CuriousAbout_This 4ポイント5ポイント  (3子コメント)

UBI does not need to start as a full substitution for a wage. It can start as 30-50% of minimum wage and grow up from there relative to the number of jobs get replaced by automation.

The world already has enough income inequality and there are signs that it's about to grow even more if we don't do something about it. And nobody wants lower/middle classes that can't afford to buy anything.

[–][deleted] 4ポイント5ポイント  (2子コメント)

And nobody wants lower/middle classes that can't afford to buy anything.

How do you derive this from inequality problem? I'm genuinely asking. This has more to do with wage stagnation, whose link with inequality hasn't been established afaik, not causal one. Real wage for middle class can grow along with inequality.

[–]CuriousAbout_This 1ポイント2ポイント  (1子コメント)

I am talking about structural unemployment which is caused by automation. "The WEF started 2016 off by estimating the creation by 2020 of 2 million new jobs alongside the elimination of 7 million. That’s a net loss, not a net gain of 5 million jobs." (taken from here) And the number of net loss is just going to increase with our technological advancement.

Automation targets low and lower-middle pay jobs, this is why I commented that nobody wants a huge portion of our society to have no income.

Income inequality is another problem that won't be solved with UBI. It is just going to be not as painful, but it will still continue to be a problem.

Plus, it is fairly logical that when having a consumer-based economy we should enable more people to consume: the rich can only eat as much food, buy as much property and as much clothes before it simply becomes senseless. On the other hand, each and everyone of us needs at least one of the basics to live.

[–][deleted] 1ポイント2ポイント  (0子コメント)

Don't mind me if I'm distrustful of the estimates of jobs that will be created, virtually all the predictions on this front have been wrong. I'll just link this paper - https://www.aeaweb.org/articles.php?doi=10.1257/jep.29.3.3

Why is income inequality a problem? I asked this here recently, I didn't get a non-subjective answer. There will always be inequality to some degree in any society, so the phrasing should be that the magnitude or extent is a problem. The usual arguments are a) democratic instability and b) has an effect on growth, the latter is obvious but still not big enough to convince someone who is ambivalent and not morally/ethically inclined on this topic.

Savings and investment are a thing, honey, they also help the economy as you learn in economics 201. The "rich" don't let inflation erode away their wealth by keeping it in big vaults and swimming in every weekend. How else do you think you get the capital for companies?

I feel like I'm on r/politics not r/badeconomics.

[–]prillin101Fiat currency has a 27 year lifespan[S] 7ポイント8ポイント  (0子コメント)

I tried to fit your post in and edit it, but sadly it bumps me up to 1184. I'll just link yours, thanks for this!

[–]Trepur349Shilling for globalism and r/badsportsanalysis 24ポイント25ポイント  (0子コメント)

slight nitpick. We both agree that Trump is wrong on free trade, but I think he's more wrong then you give him credit.

The fact that the bottom 20% of society actually loses out from free trade, while the remaining 80% directly benefits.

I disagree, not all unskilled/low-skilled labour can be offshored and the lower class are the ones who benefit the most from free trade for two reasons:

  1. They're the ones who benefit the most from decreasing prices (which free trade does) as they're the ones who can least afford current prices.

  2. The most traded goods make up a higher percentage of low-income budgets then high-income budgets.

As a result, Fajgelbaum and Khandelwal (2014) estimated that if we ceased all trade, the bottom 10% would lose 62% of their purchasing power while the top 10% would only lose 3%. Now a 20% tariff wouldn't be extreme as ceasing all trade, but it still goes to show that free trade benefits the lower class.

edit: Fixed a formatting issue.

[–]jsmooth7High Priest of Neoliberalism 14ポイント15ポイント  (2子コメント)

This is an impressively detailed breakdown. You should post this to /r/TrumpPolicy too!

[–]prillin101Fiat currency has a 27 year lifespan[S] 9ポイント10ポイント  (1子コメント)

Thanks, I'll do that now.

[–]jsmooth7High Priest of Neoliberalism 5ポイント6ポイント  (0子コメント)

Awesome. This is exactly the sort of content I had in mind when I created the sub.

[–]smurphy1 2ポイント3ポイント  (0子コメント)

Caveat: #2 leads me to the recent debt ceiling/default issue. There are other things going on here. The Fed is independent of the rest of the government precisely so it doesn't print money to pay back US debt. Yes, that means #2 is less of a factor than it otherwise would be, but #2 continues to run rampant in popular accounts of "why government debt is different." So you have reason to think #2 is not the main thing going on here, regardless of what you might see in /r/politics.

This is not exactly correct. It's true that the Fed cannot buy bonds directly from the Treasury but it can buy them in the secondary market. Since the overnight rate cannot be below the rate on short term treasuries if there are not enough buyers of treasury bonds and the rate on those bonds goes up it will bring the overnight rate up with it. As long as the Fed is trying to maintain the over night rate within a specific band it would have to act if the rate on short term treasuries rose too high by buying treasuries from the secondary market until there is enough demand for the treasuries at roughly the desired rate. In this manner the Fed is effectively "monetizing the debt" albeit indirectly.

[–]dryj 0ポイント1ポイント  (0子コメント)

Thanks a lot for this, good read.

[–]he3-1Literature is the exact opposite of empirical evidence. 29ポイント30ポイント  (7子コメント)

This sub in general seems to follow the conventional wisdom that the optimal tax rate for capital gains is zero, but I don't think that is true. Unlike the corporation tax, the empirical evidence of the 0% capital gains rate is not as strong as it was in the 90's. The infamous Piketty 2012, a 2009 JEP study, and a Saez study give contradicting results to the conventional wisdom popularized in the 90's, leaving it controversial in my eyes.

The Chamley/Judd results have been demonstrated to be robust when considered across real world tax changes rather then just inside the model. Conesa et al's model is either wrong or equilibrium takes longer then 46 years.

The optimal rate of capital taxation appears to be between zero and eight percent. Even if it is gt zero compliance costs may mean its simply easier to look to collect the revenue elsewhere.

From this link-salad of studies you can see that the low-skill immigrant question is highly controversial among economists but there seems to be a narrative coalescing- that low-skill immigrants may not hurt the economy that much (Or, in some cases, expand it). I could easily find about 10 more studies going either way, but I feel you get the idea.

The proposed negative effects are relatively small.

But, however, there is a legitimate complaint to free trade that Card really hit home with recently. The fact that the bottom 20% of society actually loses out from free trade, while the remaining 80% directly benefits.

The losses are near the middle not at the bottom (skilled trades). Its entirely within our power to manage these, its a policy failure (not trade) that we don't.

[–]alandbeforetimeWe should abandon fiat currency and use 1982 Bordeaux 14ポイント15ポイント  (0子コメント)

Question on this part:

The losses are near the middle not at the bottom (skilled trades).

Most studies I've seen cite non-skilled labour as the most impacted employment demographic by free trade policies. Why do you say that losses are near the middle? Due to government support programs for those at the bottom, but not for those who are just slightly outside the range of assistance?

[–]tayaravaknin 13ポイント14ポイント  (0子コメント)

The optimal rate of capital taxation appears to be between zero and eight percent. Even if it is gt zero compliance costs may mean its simply easier to look to collect the revenue elsewhere.

Is there a review of the literature published that suggests this, and why?

[–]prillin101Fiat currency has a 27 year lifespan[S] 7ポイント8ポイント  (3子コメント)

The Chamley/Judd results have been demonstrated to be robust when considered across real world tax changes rather then just inside the model. Conesa et al's model is either wrong or equilibrium takes longer then 46 years. The optimal rate of capital taxation appears to be between zero and eight percent. Even if it is gt zero compliance costs may mean its simply easier to look to collect the revenue elsewhere.

Do you have anything more on this? Like an article or something? Would like to read about it.

The proposed negative effects are relatively small.

That seems to be the case, but Borjas' studies are an outlier in the sense they all propose fairly large

The losses are near the middle not at the bottom (skilled trades). Its entirely within our power to manage these, its a policy failure (not trade) that we don't.

Is it? I thought Card demonstrated the poor lose out, and the poor generally are not medium-skilled. I might be wrong, but that's what I gathered from the commentary on the sub atleast.

[–]FatBabyGiraffe 2ポイント3ポイント  (2子コメント)

http://hassler-j.iies.su.se/COURSES/DynPubFin/Papers/Chamley86.pdf

http://eml.berkeley.edu/~saez/course/Judd_JPubE(1985).pdf

[–]prillin101Fiat currency has a 27 year lifespan[S] 3ポイント4ポイント  (1子コメント)

Those are all old papers though, and as I point out in the post recent models just from a few years ago show different results.

[–]Mundlifari 3ポイント4ポイント  (0子コメント)

The Chamley/Judd results have been demonstrated to be robust when considered across real world tax changes rather then just inside the model. Conesa et al's model is either wrong or equilibrium takes longer then 46 years. The optimal rate of capital taxation appears to be between zero and eight percent. Even if it is gt zero compliance costs may mean its simply easier to look to collect the revenue elsewhere.

Wouldn't a low corporate tax rate carry huge risks when it comes to wealth concentration?

Someone with a worth of say 1 billion will have most of that invested and only requires a tiny fraction of his wealth for expenses. Which means he can keep his money in some parent company, which always re-invests in other businesses. This gives the 1% (for lack of a better word) a big advantage and will likely concentrate wealth even more on some few people. At least that's the outcome I would expect.

[–]OldSeaMen 8ポイント9ポイント  (11子コメント)

There is more than just affect of wages from the immigrants of Mexico. They are also gaining social benefits which they do not have to pay for being an illegal immigrant. They can use our public schools without paying taxes and hospitals can't turn them away no matter what. Both of these factors will increase cost to legal citizens. How much... I am not sure, but its a common point I hear living in Texas.

[–]prillin101Fiat currency has a 27 year lifespan[S] 12ポイント13ポイント  (10子コメント)

The CBO post points that out, and how making them citizens would actually reduce the deficit.

[–]OldSeaMen 1ポイント2ポイント  (9子コメント)

At work and can't read the links right now but does it factor all the children that moved across the border without their parents when DACA was announced?

[–]prillin101Fiat currency has a 27 year lifespan[S] 13ポイント14ポイント  (8子コメント)

From my looking, it does not. Curious though, the child-immigration would have to be pretty large to cut into a $50 billion lower deficit per year.

[–]OldSeaMen 2ポイント3ポイント  (7子コメント)

Last I saw roughly 500000 were approved to stay. But this includes those who have served in the military and those with high school degrees meaning they very well could have a net positive effect. I am fairly certain that the bulk is children though. And overall it may not cut into the 50 billion(federal I assume I really need to read the paper) but it would dampen California and Texas where nearly half of the 500k were approved.

[–]prillin101Fiat currency has a 27 year lifespan[S] 5ポイント6ポイント  (6子コメント)

Ah, so it's 5,000,000 illegal child immigrants without parents? A lot more than I thought there'd be.

[–]OldSeaMen 2ポイント3ポイント  (5子コメント)

500,000 approved through DACA from outdated sources. I have no idea the total number of children without parents.

[–]prillin101Fiat currency has a 27 year lifespan[S] 6ポイント7ポイント  (4子コメント)

Ah, I misread it. I doubt the majority of those were unparented children, there'd have to be a fair share of evidence pointing that way and I don't see any.

[–]OldSeaMen 2ポイント3ポイント  (3子コメント)

It was all over the news down here. It got so big Obama had to meet with Rick Perry about it because we had no where to put all the kids.

[–]TotesMessenger 8ポイント9ポイント  (5子コメント)

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[–][deleted] 13ポイント14ポイント  (3子コメント)

I'm lost on why the streamer is in there.

[–]LimFromJim 13ポイント14ポイント  (0子コメント)

Because he gets very political in his streams, and a portion of his base likes Trump and shitposts like 4chan on it, while he hates Trump.

[–]SpaceOfAids 2ポイント3ポイント  (0子コメント)

OverRustle BasedGod NoTears

[–]ExUnoPlures 5ポイント6ポイント  (0子コメント)

Who wants to start a pool? Ten bucks says that this post stays up on bestof.

[–]Trepur349Shilling for globalism and r/badsportsanalysis 6ポイント7ポイント  (4子コメント)

The median US income is around $51,000, most Americans will have the bulk of their taxes levied at the tax rates of the bottom two (0% and 10%).

Actually that's median household income not median personal income. So after income splitting that means almost half of households would pay close to 0 income tax.

So to borrow from Romney, a society where 47% of people don't pay any taxes cannot function.

[–]lorenzoryeI am not accommodating Pinochet. 2ポイント3ポイント  (3子コメント)

Why?

[–]Trepur349Shilling for globalism and r/badsportsanalysis 1ポイント2ポイント  (2子コメント)

why what?

[–]lorenzoryeI am not accommodating Pinochet. 2ポイント3ポイント  (1子コメント)

Why would such a society not function?

[–]Trepur349Shilling for globalism and r/badsportsanalysis 9ポイント10ポイント  (0子コメント)

oh, I was just poking fun of Mitt Romney there, I don't actually believe that, lol

[–]wshanahanFEEL THE BERNKE 46ポイント47ポイント  (0子コメント)

VERY HIGH ENERGY. /u/Prillin101 is a NIMBLE NAVIGATOR.

[–]wshanahanFEEL THE BERNKE 27ポイント28ポイント  (1子コメント)

You're making Bad Economics great again #MBEGA

[–]TheoryOfSomething 11ポイント12ポイント  (0子コメント)

Maybe Make Economics Good Again?? #MEGA

.....thats a pretty badass hashtag, you gotta admit

[–]usrname42chronicler of the badx wars 24ポイント25ポイント  (23子コメント)

The Trump RI is here!

[–]prillin101Fiat currency has a 27 year lifespan[S] 19ポイント20ポイント  (21子コメント)

Yeah, I had some free time inbetween school work I was procrastinating on and decided 'fuck it, we'll do it live.'

[–][deleted] 3ポイント4ポイント  (20子コメント)

So, this is pretty good--don't vote for Trump. But are there any Good Econ candidates that (1) have a good chance of winning, and (2) have a good chance of not being indicted?

[–]prillin101Fiat currency has a 27 year lifespan[S] 18ポイント19ポイント  (16子コメント)

Your only real choice is Hillary, she's the least badecon with the best foreign policy but also she's a shitter so it kinda sucks but yeah only choice really.

[–]brianwithay 7ポイント8ポイント  (0子コメント)

yea, politics expert here and i agree

[–]LimFromJim 2ポイント3ポイント  (4子コメント)

Hillary's foreign policy is not good. She's a war hawk, are you kidding me?

[–]prillin101Fiat currency has a 27 year lifespan[S] 9ポイント10ポイント  (3子コメント)

Better than Bernie's. Hawkism is shit but Bernie's foreign policy platform is especially shit.

[–]LimFromJim 3ポイント4ポイント  (2子コメント)

That you haven't even read.

https://berniesanders.com/issues/war-and-peace/

You haven't said this, but I suspect that the reason you think she has "the best" foreign policy is because of her experience (experience doesn't matter if the results of your experience are terrible) and the way she sounds when she talks about foreign policy. Just because you sound confident when you speak about foreign policy (which she does, and Bernie doesn't) does not mean that you know good foreign policy. This is the lady that openly touts Henry Kissinger's appraisal-as if that's a good thing.

[–]davidnayias 10ポイント11ポイント  (1子コメント)

It's still better than "I voted against Iraq"

[–]LimFromJim -1ポイント0ポイント  (0子コメント)

Uhm, so "I voted for Iraq" is better? Fuck off, I like Hillary too but her foreign policy is just going to get is into more wars.

[–]Acmnin -3ポイント-2ポイント  (9子コメント)

Meh, sure some of Mr. Sanders plans are badecon but single payer is certainly good Econ, and it's arguable what the effect of his tax rate changes would do overall.

What's with the assholes down voting?

[–]prillin101Fiat currency has a 27 year lifespan[S] 16ポイント17ポイント  (8子コメント)

The idea is fine but the execution is pretty shit, if you were to do an actual analysis around 20-40% of it is actually unfunded- he just fudged the numbers.

[–]Acmnin 1ポイント2ポイント  (7子コメント)

I'd imagine the plan would change immensely before actual implementation.

[–]prillin101Fiat currency has a 27 year lifespan[S] 11ポイント12ポイント  (6子コメント)

Doesn't seem to be true. He assumes that changing to single payer inherently makes healthcare cheaper by 20-40% and then suggests most of it can be paid by the wealthy- both facts that are wrong but he takes as gospel. He's not gonna change on those two positions, and because of that any plan he gives will create a chronically underfunded healthcare system.

He also wants to follow the British route with the NHS, which is expected to face ENORMOUS cost issues within the next decade or two because of productivity issues (Government neglected productivity improvements).

[–]Acmnin 0ポイント1ポイント  (5子コメント)

I was under the impression the tax he suggested to fund single payer would come from every economic class? Do you have a source for how funding would be untenable? I'd imagine quite a change in the cost of health care with the elimination of private insurers, 40% unlikely but you don't think close to 20% a manageable figure?, and its many levels of administration. Did he not also suggest some sort of government agency to control prices in the market as well?

[–]prillin101Fiat currency has a 27 year lifespan[S] 10ポイント11ポイント  (4子コメント)

Very liberal figures put it at sub 10%.

He suggests some increases on the middle class for it, but proposes that the bulk of it would be paid for by the wealthy.

I can't find the original piece this comes from, but I found a good Krugman echoing my opinion.

This article linked within by Krugman finds that it's actually FIFTY PERCENT unfunded!

[–]sobels 9ポイント10ポイント  (2子コメント)

Hillary Clinton has a good (actually rather excellent) chance of not being indicted. I'll abstain on whether she espouses good economics.

[–]prillin101Fiat currency has a 27 year lifespan[S] 3ポイント4ポイント  (1子コメント)

Oh, why not?

[–]sobels 9ポイント10ポイント  (0子コメント)

IANAL, but here's what a legal analyst from ABC News says.

tl;dr- Intent and/or gross negligence matters for criminal mishandling of classified information, and there are several reasons why that would be difficult to prove in this case.

[–]jsmooth7High Priest of Neoliberalism 2ポイント3ポイント  (0子コメント)

Trump R1 Party!

[–]corona1911 8ポイント9ポイント  (0子コメント)

Trumps platform is this:

Make sure Hillary gets elected.

[–]HumanKapital_ 24ポイント25ポイント  (3子コメント)

Building wall = increasing aggregate demand

[–]gxti 9ポイント10ポイント  (0子コメント)

I hope that was an intentional pun about concrete.

[–]Draken84 7ポイント8ポイント  (0子コメント)

and so is pulling it down after he's out of office

[–]LiveFree1773 2ポイント3ポイント  (0子コメント)

Digging holes and filling them in = increasing aggregate demand

[–]zuvielkase 5ポイント6ポイント  (4子コメント)

might i suggest posting this in /r/AskTrumpSupporters?

[–]prillin101Fiat currency has a 27 year lifespan[S] 12ポイント13ポイント  (3子コメント)

someone can do it if they want, i don't feel like engaging with them.

[–]zuvielkase 7ポイント8ポイント  (0子コメント)

fair enough. i wouldn't either.

[–]Chewpachups 2ポイント3ポイント  (1子コメント)

Somebody did and it looks like it was up for all of like 2 hours. Saw it for a moment and then it vanished. Hilarious.

[–]prillin101Fiat currency has a 27 year lifespan[S] 2ポイント3ポイント  (0子コメント)

Yeah I just read the comments of it.

It's sad how delusional people are.

[–][deleted] 16ポイント17ポイント  (8子コメント)

Trump is DONE HERE. He's going the way of bernator. This post saved America from fascism.

[–]ElvenAshwinDon't know anything of economics 20ポイント21ポイント  (1子コメント)

All jokes aside this post is extremely useful when Trump supporters claim people only dislike him because of Media bias, and that his "policies aren't that bad".

[–][deleted] 15ポイント16ポイント  (0子コメント)

I'm glad to see us start R1ing Trump. That moron certainly deserves it. I'm not sure many of his supporters are really evidence based decision makers though.

[–]besttrousers 23ポイント24ポイント  (4子コメント)

Sanders

Trump

One by one they fall, by BE's flaming sword.

[–][deleted] 13ポイント14ポイント  (1子コメント)

Just proving that we're shills to the status quo!

[–]DrSandbagsSurgically-Augmented Dickey-Fuller 26ポイント27ポイント  (0子コメント)

Koch/Monsanto 2016

[–]ThatAssholeYahwehI am become TPP, destroyer of jobs 5ポイント6ポイント  (1子コメント)

by BE's flaming sword.

For the night is dark and full of terrors - Azor Ahai has been reborn as /u/prillin101! This megathread is Lightbringer reforged, the salt: the tears of trumpists, the smoke: the policy proposals of Trump being burned. This November Winter is coming, but BE is prepared. Praise be to the Lord of Light!

[–]prillin101Fiat currency has a 27 year lifespan[S] 2ポイント3ポイント  (0子コメント)

This was great lol, thank you!

[–]Llan79 3ポイント4ポイント  (0子コメント)

GET HIM OUT OF HERE! GET HIM OUT!

[–]davidnayias 5ポイント6ポイント  (0子コメント)

Trump had bad policies? Who would have thought?

[–]TotesMessenger 8ポイント9ポイント  (4子コメント)

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[–][deleted] 11ポイント12ポイント  (0子コメント)

> /r/TrumpPolicy

> 29 readers

lul

[–][deleted] 17ポイント18ポイント  (2子コメント)

/r/destiny?

[–]rayhond2000 11ポイント12ポイント  (1子コメント)

Just a bunch of autistic memers. We like to talk about politics sometimes.

[–][deleted] 4ポイント5ポイント  (0子コメント)

Surprised the cross over isn't higher.

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[–]zeperf 1ポイント2ポイント  (0子コメント)

Just want to give a link to Erik Erikson's site since RedState is mentioned and, currently, his 3rd party plan in case Trump wins that he is putting together with Washington insiders is quite interesting... http://theresurgent.com/

[–]OliverSparrowR1 submitter 1ポイント2ポイント  (0子コメント)

This is fun.

[–]bherdt 0ポイント1ポイント  (2子コメント)

What is the corporate inversion that he refers to?

[–]prillin101Fiat currency has a 27 year lifespan[S] 0ポイント1ポイント  (1子コメント)

corporate inversion?

[–]brianwithay 0ポイント1ポイント  (0子コメント)

wow thanks for the invite to greece u tard