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Community => Politics and Government => Topic started by: Id82 on December 19, 2017, 11:33:28 am

Title: Tax Cut Predictions?
Post by: Id82 on December 19, 2017, 11:33:28 am
So it's seeming highly likely that the Republicans are going to pass this tax reform.
Does anyone have any predictions on how this is going to effect the economy?
Is this going to be another repeat of the economic recovery tax act of 1981? With an increase in high interest rates and a ballooning deficit and tripling the nation debt?
The tax cuts could be argued favorably at the time due to the country going through a recession, but the tax cuts were probably way too much and favored the wealthy class and due to these things happening Reagan increased taxes many times during his presidency.

As for now do we see much of the same happening? It doesn't seem to make sense to cut taxes now due to the economy doing well. Will there a be a boom that the Republicans are predicting? or will it lead to more problems and more inequality? I'm not an expert on taxes or tax cuts so I really just want to know what kind of effects this will have?
Title: Re: Tax Cut Predictions?
Post by: dpareja on December 19, 2017, 11:39:01 am
1920s: Cut taxes on the rich, deregulate corporations, economy booms.

1930s: Oops.

Early 1980s: Cut taxes on the rich, deregulate corporations, economy booms.

Late 1980s: Oops.

Early 2000s: Cut taxes on the rich, deregulate corporations, economy booms.

Late 2000s: Oops.

It's almost like this has been tried before.
Title: Re: Tax Cut Predictions?
Post by: Id82 on December 19, 2017, 11:45:27 am
It's almost like that definition of insanity which isn't actually the definition of insanity but people use it to describe  people doing the same thing over and over again and expecting different results are crazy.

I wanted to see predictions of how this was going to play out? Are we just waiting for another economic recession or depression at the end of Trump's term/terms?
Title: Re: Tax Cut Predictions?
Post by: ironbite on December 19, 2017, 03:15:10 pm
WHERE'S MY FUCKING LIKE BUTTON!?
Title: Re: Tax Cut Predictions?
Post by: dpareja on December 19, 2017, 04:04:20 pm
https://www.youtube.com/watch?v=6si0EYx_Yc8

It appears that the tax-increase/reparations/fuck-blue-states bill will pass Congress and be signed into law by the President.

Bob Corker, who previously had been opposed to the bill on the grounds that it added too much to the deficit, has flipped his vote. In what I am sure is a complete coincidence, a tax break for people whose wealth is primarily held in real estate was increased late in the conference committee discussions, which will just incidentally save Sen. Corker over $1,000,000 per year in taxes. (Never mind what it will save Trump.)

Apparently, Paul Ryan was seen "skipping through the halls of Congress."
Title: Re: Tax Cut Predictions?
Post by: Id82 on December 19, 2017, 04:13:57 pm
I'm sure Paul Ryan skipped back to his office took out his photo of Ayn Rand and a copy of Atlas shrugged and jerked off into a 400 dollar handkerchief he keeps in his desk after passing this garbage.
I bet if they could they would only have passed tax cuts for the wealthy but to not seem like total fucking scum bags they included some tiny tax cuts for the middle class that are set to expire in a few years while the rich can keep reaping the benefits permanently.
Title: Re: Tax Cut Predictions?
Post by: davedan on December 19, 2017, 04:31:28 pm
Paul Ryan will quit now in 2018.
Title: Re: Tax Cut Predictions?
Post by: dpareja on December 19, 2017, 04:37:50 pm
Paul Ryan will quit now in 2018.

Probably partly because he's done what he came to Washington to do (implement Ayn Rand's vision) and partly because he might actually face a real challenger for his seat.

EDIT: Seen from a partisan Republican (he'd probably resent that, but he is):

Quote
Yeah when I saw the initial House Bill I about went through the roof. Seeing the finished product though, I've done some quick math and the fact that I'm well within the eligibility bracket for the full child tax credit makes my life a LOT easier. Overall, this bill is a bit of a 'fuck you' to high tax (generally, but not universally, blue) States, but the expanded child credit helps a lot, and even the $10k in state taxes helps on the margins.

Bottom line: I'll take it.

EDIT #2: http://www.cbc.ca/news/world/tax-bill-house-senate-1.4456077

Oops, looks like the GOP has to go back to the drawing board for a day.
Title: Re: Tax Cut Predictions?
Post by: Tolpuddle Martyr on December 19, 2017, 09:23:29 pm
From the point of view of the billionaires, they were still rich when the economy asploded after being their personal playpens in the 30s, late aughts et al. It was every else that got screwed.
Title: Re: Tax Cut Predictions?
Post by: Id82 on December 20, 2017, 01:42:42 pm
Welp that's that. Republicans just rushed through a senseless tax reform that they'll be bragging about for years despite the damages it will most likely cause especially when they probably push for entitlement reform next year to pay for all of the tax cuts they want to implement. It feels like they just threw something at the wall and are hoping it will work instead of really thinking about it. I really really hope this is pissing off a lot of people but I haven't been able to find any responses to it online.
If Dems take back the house or senate next year I don't know if there is anything they change taxes. What am I saying they're as much in bed with the corporations as the Republicans are.
Title: Re: Tax Cut Predictions?
Post by: ironbite on December 20, 2017, 03:44:03 pm
From the point of view of the billionaires, they were still rich when the economy asploded after being their personal playpens in the 30s, late aughts et al. It was every else that got screwed.

And that's only because, despite the economic downturn, the dollar was still strong.  I have a feeling this might be it for the dollar.

Ironbite-and then everyone's fucked.
Title: Re: Tax Cut Predictions?
Post by: dpareja on December 20, 2017, 07:14:24 pm
Oh man, hearing Mike Pence go on about how great this tax cut bill was... "All Trump wants is for you to verbally fellate him for three minutes and ten seconds."

EDIT:

(https://pbs.twimg.com/media/DRh5CFQVoAAsiXD.jpg:small)
Title: Re: Tax Cut Predictions?
Post by: Id82 on December 20, 2017, 07:36:31 pm
The thing is Trump has really had little to do with this legislation. His presidency has really been ruled by Paul Ryan and what Paul Ryan wants so far. This was all Paul Ryan. Trump is just the idiot CEO who wants his corporation to make money and will take any victory that gives it to him. Trump can stand up there and say he accomplished a great victory for his administration but the Republican Congress is really sitting at the side saying aren't you such a good boy. You did a real good job good for you with a little pat on the head.
Title: Re: Tax Cut Predictions?
Post by: dpareja on December 20, 2017, 07:42:03 pm
It's mostly run by Paul Ryan, except for all the young lunatic conservative judges Trump's putting on the federal bench. That's all McConnell.
Title: Re: Tax Cut Predictions?
Post by: Cloud3514 on December 20, 2017, 11:57:54 pm
AT&T has announced that they're going to give 200,000 of their employees a $1000 bonus. Reminder: $200,000,000 isn't even 1% of the taxes they pay.
Title: Re: Tax Cut Predictions?
Post by: dpareja on December 21, 2017, 12:31:16 am
AT&T has announced that they're going to give 200,000 of their employees a $1000 bonus. Reminder: $200,000,000 isn't even 1% of the taxes they pay.

Also, AFAIK, they announced that weeks ago, before any of the details of this tax-increase/reparations/fuck-blue-states bill were known.
Title: Re: Tax Cut Predictions?
Post by: Id82 on December 22, 2017, 07:12:14 pm
So Trump wants to get a huge infrastructure bill passed next. I'm all for better infrastructure, but with what fucking money Trump? You just cut taxes for everyone especially for the people who could fund a large infrastructure bill. Where are you going to get the money? Not to mention were already in massive debt and the deficit is going to explode because of your careless tax plan.

Not to mention Republicans are never too keen on infrastructure funding.
Title: Re: Tax Cut Predictions?
Post by: ironbite on December 22, 2017, 08:12:43 pm
Oh it gets better.

So Trump signed the Tax Scam into law before Christmas right?  Know what this means?  It means the penalties that come with the bill start next year.  Know what that means for mid terms?  It means that the GOP gets to fend off legit attacks from the Democrats about raising taxes.

Ironbite-all because the moron couldn't wait.
Title: Re: Tax Cut Predictions?
Post by: Eiki-mun on December 22, 2017, 08:18:39 pm
Oh it gets better.

So Trump signed the Tax Scam into law before Christmas right?  Know what this means?  It means the penalties that come with the bill start next year.  Know what that means for mid terms?  It means that the GOP gets to fend off legit attacks from the Democrats about raising taxes.

Ironbite-all because the moron couldn't wait.

Do you have a source for this? I want to be able to share it with people and a source makes it a lot easier.
Title: Re: Tax Cut Predictions?
Post by: Cloud3514 on December 23, 2017, 12:41:29 am
So Trump wants to get a huge infrastructure bill passed next. I'm all for better infrastructure, but with what fucking money Trump? You just cut taxes for everyone especially for the people who could fund a large infrastructure bill. Where are you going to get the money? Not to mention were already in massive debt and the deficit is going to explode because of your careless tax plan.

Not to mention Republicans are never too keen on infrastructure funding.

Not to mention the money approved for the fucking wall.
Title: Re: Tax Cut Predictions?
Post by: Dappler on December 26, 2017, 10:34:59 am
This is a lovely idea for a thread. Shall be interesting to see what occurs.

Yes, there are the out and out lies that anyone (who wants to) can see through in a couple of seconds flat, and yes, Reagonomics has never worked and will never work, but how it will apply between now and 2020 or 2025 will be interesting to see, not least because it's a little bit like climate change, - denialists galore, cherry picking, special interests selling everyone else down the river, and while there is short term immediate pain from isolated events, crucially there's a shit-ton of trouble storing up in the long term.

Have to dash. Will get to this later.

First prediction: The Republicans will now switch to deficit, deficit, deficit to attack their bĂȘte noire programmes, although not with bills before the midterms if they have any clue. Words now. Bills later. They will victim blame the deficit (on those that will suffer from their nastiness the most, and who had nothing to do with the deficit in the first place).

Second Prediction: The deficit will balloon by a lot more than the CBO predicts, and not because of changes in legislation, but because their models weren't sensitive enough, and also didn't predict how business will react.

Third Prediction: They will have to tweak the repatriation 5% tax (joke) to get significant interest.

More predictions and more on the first three later.
Title: Re: Tax Cut Predictions?
Post by: Dappler on December 28, 2017, 05:17:25 pm
So in terms of macroeconomics, in my view, you can pretty much take the following as read. Inequality is at unparalleled levels in capitalist society, exceeding anything back to the times of robber barons and penury and poor houses. Bill Clinton - the last guy to run a surplus was very pro-business, slashed welfare, introduced tax cuts and punitive reforms, etc., added to inequality, but the system overall, while harmed in some regards, flourished mightily in others, and the impact of a bunch of his stuff, while swamped by Bush, was still noticeable (both good and bad) when Obama took office and even today. Hillary would've been the same as Bill. Slightly better in some regards, but hawkish, pro-business, and inclined to roll with idiotic Republican fiscal accusations and narratives than refute them. Sure she wouldn't have appointed the Mulvaneys and Millers, and DeVoses and M-no-chins, of the world. The Perrys and Pruitts. But she would've kept inequality rolling along. The Republicans would've been even more destructive (and batshit insane) in opposition than they were under Obama, so a Clinton Presidency would've been a disaster for many reasons - albeit very different to the Trump disaster of colossal ineptitude. Many of the economic damages Bush wreaked on the economy were thoroughly predictable - many were not, and yes, his 8 years thoroughly fucked things up, but many of those problems started under Clinton. The Norquists have always aimed at cutting taxes to starve government spending ignoring the tangible damages from doing so, and the beneficial multipliers from not doing so, with the aim of wrecking any functionality, and following this up with further cuts, further starvation, and repeat. The problem is the Clinton administration had already peeled off into damaging society and the economy in this manner, and moved from easy fixes into harm. Yes you can save money in sensible ways like controlling defense or healthcare pricing (while not cutting back on quality or quantity) or by finding genuine efficiency gains, or by promoting catalytic policy. But now you hit the problem that Trump is trying to actively destroy things through deliberate mismanagement, and fiscal starvation, and lack of support, and now this will be ramped up further by idiotic tax cuts for the super rich, many of whom make Gordon Gecko look like Gandhi, and they are already hiding most of what they have, sucking it out of the economy. Follow this up with lack of investment in infrastructure and growth and education and safety nets when they have already been raped and pillaged to breaking point for a generation or two, and what is already a colossal problem is about to get much, much, MUCH worse.

The Laffer curve is an insult to the fucking napkin that it was drawn on, and the Phillips curve was too simplistic in the 50's and 60's, without 99ing (and worse) the unemployment figures, and underemployment figures. The employment models are different nowadays, not to mention the demographics and personal debt loading, and every other conceivable factor. The fact that people still keep thinking the Phillips curve is going to kick in any second now - even after 10 years of unparalleled multitrillion dollar 'easing' cash injections into the economy is farcical. Split the wages half of the Phillips curve by earnings and it's more like a Newtonian prism. The well to do are doing better, everyone else is lucky to be treading water, or is actively being trodden on. Mentioning these two jokes, because they underpin current Republican magical thinking, even more than Galtian trickle-down, which made sense in the middle ages, and maybe even up till common people started owning their own land, and banks would loan to anyone they wanted to. Since then it's been nothing but a self serving lie that rich people tell themselves when they want to feel like Kings (and to stop the plebs beheading them). The people that don't subscribe to the Bannon/Norquist, starve the beast model of royally fucking up the country, believe those two curves will be the saviour of the tax cuts and here comes growth of 5% GDP to outrun the deficit, so the deficit as a percentage of GDP shrinks and becomes less of a problem. It is utter shit.

Dense and poorly written, I know.

So how does all that play into predictions. Well black swans aside, such as the fact that there's a megalomaniacal, butthurt, insane, thin-skinned, power-mad, fuckwit who thinks nothing of starving his own citizens in order to gain more nuclear weapons, and is so unbalanced he would happily start a war on the Korean Peninsula before admitting he was wrong is a massive worry, particularly for South Korea ------ and frankly, if we're going to go there, Kim Jong Un isn't much better. But that aside, the current 'administration' is abyssmal. If they're not deliberately destroying things, they're doing it because they're too dumb to realise the consequences, or choose to ignore anyone pointing out the problems. If they're not being fed baloney by vested interests, they're being radicalised into suicide bombing by zealots like Bannon.

Macroeconomically speaking things are stressed. They are extended and distended and stretched. Clinton would have been a huge concern, even without Republican douchebaggery and the alt-right trying to start a civil war. Trump is deregulating all the safety valves, some like for the environment, damage will be incremental, localised, or not obvious for a long time. This may well not be the case with the economy, even though it will be for most of the unseen stuff in the economy (which will be a lot of the harm). He is a colossal fuckwit, with too many lines of evidence to even think about, let alone voice, and this could be a massive problem, manifesting itself in any number of ways.

Title: Re: Tax Cut Predictions?
Post by: Dappler on December 28, 2017, 06:34:22 pm
So as for the predictions.

1/. From above, the Norquist death spiral starve the beast, deficit/spending, attack programmes and the government in general will be one of the dominant spins and narratives in 2018. They will scapegoat tiny irrelevant things that wouldn't actually make any difference to the deficit (although they'll claim otherwise). They won't touch the programmes that might actually help a bit - despite the fact they've already hacked into medicare and medicaid to a disgusting degree. The lying and hypocrisy will be in overdrive, as will the ad hominems against anyone who dares differ.

2/. From above, the deficit will hit problems for many reasons, but you can look at Kansas for a bunch of that, ignoring that Kansas was trying to get into a war with neighbouring states, and that will not mirror with Mexico and Canada, but revenue issues will be chronic. The Republicans will bluster through this until early 2020, when they will start attacking spending to a degree they never have before. It will be ugly. Given current popularity is high compared with Trump next year, even if Trump survives to 2020, unpicking this unholy tax mess will be difficult, and most of the issues will really start to impact post 2020.

3/. From above, repatriation is a load of bollocks, and even though they are offering an insulting negligible 5% tp bring monies earned overseas into the country, it'll only work as a political or token gesture from the CEO's or if they sniff a 10% or 20% rate around the corner, which isn't the case. Trump's 4 trillion always was a load of shit here. There is a strong case much of this money should be going into the coffers of the countries the goods and services were finally sold in, without shell games, but this is many years away from occurring (2025 would be a miracle), and is unlikely to be levied retrospectively, particularly against the indispensable giants we know and love today - and even the ones we loathe. The simple fact is this money is sitting offshore because the corporations don't need to (and don't want to) 'bring it home'. This is for a bunch of reasons, but  the include, it sits at 100% on their NTA, and given current share ratios for price to NTA, this money is working overtime to pump up their shareprice, even safely sequestered offshore. The world is drowning in tens of trillions of dollars of artificially cheap credit, particularly in the two largest economies in the world, and the EU and Japan are not far behind with their plans to stimulate feeble growth. Companies nowadays quite simply can offer junk bonds and investors are falling on them for two main reasons - one the current US share bubble actually adds credibility when it shouldn't really, and two, conventional bonds offer no return, so it's pump even more into shares, or go for larks like this. The companies do not need the cash and do not want the cash. They have no incentives to bring jobs back, or to hike wages, AND, if the Republicans had remotely cared about this, they could've crafted incentives to make sure these things would happen. They didn't. When they're claiming it's going to happen, they've either drunk the koolaid, or they're taking the audience for fools and lying their rings off. If companies do bring it home, it's because they can't be assed running a bond offering, and want to do a share buyback to hike their shareprice. Even for M&A, they'd probably just shift it around offshore or use it as leverage to tweak who gets how many shares of what. If Trump is banking on 200b for this - he's an absolute moron / liar.

4/. I don't know the answer to this one, but it will be interesting to see how many people in the SALT affected states switch to being self employed (or similar) for tax reasons. It could be quite a few --- n x 10^6, 10^5 ? There may be a slight dampening in house prices, but it shouldn't trigger the equivalent of a mortgage belt prices. Foreclosures wouldn't happen for this reason, unless thing were poorly managed individually and other factors occurred to ensue overleveraging. Mulvaney, and repealing Dodd-Frank aren't going to impact here noticeably. (Hope I'm not wrong on that one).

5/. Border adjustment taxes will remain a dead issue despite Trump being an idiot with NAFTA and China every chance he gets. There will be noise. Trump may even, Particularly if CNN says he wouldn't dare when he starts threatening to, not sign the new NAFTA agreement. He will climb down quietly a week later - unless his ego is goaded. All hell will break loose if he doesn't, and if he doesn't get the opportunity to get it done quietly, it will be interesting to see how he digs himself out of his own mess. Bannon's lost this one though, and it will get raised every time the unflattering (in his 'mind') trade deficit figures arrive, but it is dead. Republicans still are the party of globalisation, no matter how much shit their racist base has to eat.

6/. The stock market will continue to defy expectations and climb further (for now!). Overseas stocks are already value for money in comparison and have been for a while, but the simple fact is, stocks are one of the few forms of investment offering a (very healthy) return on investment right now. This is problematic on both counts - it is overheating, and other investments are not performing. Which gets to one of the unknowns, and it may even come back to Trump being a colossal fuckwit and his ego. (More on this one later)

7/. Bitcoin will continue to be whippy as fuck! It is the Trump of coins in many regards. True believers. Nothing to back it up. Needs the oxygen of publicity to survive. Relies on greater fools and wishful thinking. Massively unscalable. Terrible for the environment (with no benefits). Extremely dodgy funding, and criminal and rogue state money laundering issues. Associated with a bunch of satellite scams. Etc. The oxygen of publicity is still a thing, and the greater fools, particularly in the East are still flocking in. Mining is increasingly problematic. Scaling is problematic. It is failing as a currency. States are getting nervous about it. Hacking is an issue. 80% of the servers being in China is an issue. Once it starts to go down, it will probably go below 1,000 again within 3-6 months of going below 7500. It *may* get above 25,000 first. The large stakeholders cannot ease their way out, they are stuck with it and can only hype it. It is not sustainable in any way. It is more likely that it will lose popularity/faith than states forcing it onto the black market. No comments on what the next bitcoin will be. It will not work as a safe haven if the stock market gets the jitters. Nor will it work like a Berkshire Hathaway share.


... not trusting the save buttons, etc., yet ...
Title: Re: Tax Cut Predictions?
Post by: Id82 on December 28, 2017, 06:56:28 pm
Wow,  tell us how you really feel.
J/k. That was really well thought out thanks for sharing. Do you hand any ideas of how to stop this train from driving off the unfinished bridge?
Or are we heading towards the largest global depression the world has ever seen?
Title: Re: Tax Cut Predictions?
Post by: Dappler on December 28, 2017, 08:37:01 pm
Still not quite done thinking about stuff...

There's that saying - if you owe the bank $1,000, you have a problem. If you owe the bank $1,000,000, the bank has a problem. The USD still has hegemony. China has well over 1tn USD (and huge issues with it's state sponsored/encouraged/mandated domestic loans, and overproduction of of housing, infrastructure, steel etc., domestically. It's probably enough of a juggernaut to plow through things relatively unscathed. The US because of the dollar being the default global currency, and for other reasons, is a lot more immune to trade deficits affecting currency strength than is the case for most other currencies, so there'll be no devaluing the dollar to devalue the deficit either.

The climate change analogy is a real thing for inequality. The weak and vulnerable suffer. The rich continue to profit. Things continue to get worse. Suffering increases. Perturbation increases. Repeat, but worse. Things tend not to explode. things may well just get worse and worse for years. it could also go tits up too, but more on that later, if I get round to it.

8/. So the US deficit in 2018 will be a big thing! The debt ceiling will come into play, big time. Yes Trump pulled that stupid stunt with DACA and can't shut up about his wall, but he also used to, when campaigning, do his usual 'business' stunt where he threatened to renege on paying his bills to obtain a haircut on the price. He actually bragged about wanting to do that with T-bills. Threatening to default on debts is something countries like Argentina or Greece do. It's not smart when you have 600b-1000b on Notes and other securities expiring, both in 2018 and 2019, which will need reissuing on top of any raising of the debt ceiling, and as it is the fed is the organisation buying trillions of the bills, and they're trying to unpack their position, which means selling them to someone else. There's more than 5 trillion USD of notes, etc., which they want to unload into the private sector, and if the fucking moron of the United States, starts gobbing off about reneging on the safest bills in the world, who on Earth would buy them, and boy does he gob off! It'd be the people that refused to believe he would or could, but it'd still stuff the price of repayments around, adding hundreds of billions, if not trillions to the debt loading, even if a bunch of that would be deferred.

And that is starting to hint at where things could go spectacularly wrong. Yellen knew what she was doing in terms of unravelling positions without startling or alarming the herd market. It's been much slower than she wanted, but no one has been spooked. She knew she had to go slow and that was better than trying to bend reality to suit your desires. Trump replaced her, just because of Obama. Powell is not an economist. He does not know his own mind on this stuff. Who tells him what could be extremely problematic if he fails to handle things deftly or confidently. If the markets lose faith, all kinds of shit could hit the fan, and he's the guy who has to offload the QE bonds to boot. Trump has already bragged about high interest rates (and lied about them), and during his tax nonsense, boasted about the economy going like a rocket, and like a imbecile thinks the higher the inflation figure the better. The fact he wants to put gasoline on an overheated market  and light it, is concerning. The fact he's an imbecile - doubly so. If he starts wanting Powell to hike interest rates, if it gets done wrong it could go tits up in a thousand different directions, not least the bonds rate exceeding the actual interest rates, increasing the next generation of debt, or causing the shares bubble to burst, etc. Trump bragged about the stock market, even though it was all Yellen recently, and the stewardship during the GFC before that, and there are many overhanging issues. A decade of printing money to buy your own debt being possibly one of the more innocuous ones. Stocks more than doubled under Obama. Bush took 2 years to fuck Clinton's economy up. This year's share rise had nothing to do with Trump, particularly given the companies effectively paying far less than 21% were the ones going gangbusters and the small caps were stagnating badly. Didn't stop him boasting about it though, and claiming credit where none was due. So Trump, given his first instinct is to gob off - good or bad, but particularly when something bad happens, is not going to calm markets if they get nervous - just the opposite. He also has the ability to completely upset the apple cart of his own accord, and he's wrapped his ego around the DOW and S&P, and probably even actually believes it's him. He's a deluded fuck.

And the reason stocks are so overvalued was the lack of other options, and so many mandated investments. The fed is trying to make fixed yields and other forms of investment more appealing, but so far they haven't quite got the balance right. If they rush into it (as Trump is wont to) the pendulum could swing the other way and cause a rout, and once the stampede starts, fear keeps it going.

Which of course gets to

9/. Mueller. First half of 2018 is going to be interesting/chaotic/cataclysmic! Trump will not handle this. Who knows where when or how he will lash out. There will be more indictments in the first quarter of 2018. Whether Pence and Kushner are in that round will be interesting to see. Mueller should really hold the dice back as long as he can until he has all his ducks lined up, but he's got there a lot quicker than anyone expected. President Ryan in July is an insanely long shot, but disturbingly possible, even after burning his political capital with this horrendous donor tax giveaway... Trump will not sit there and take it. The markets would probably be happier with the Republicans in and Trump out, but boy will there be discord on the way, and the higher the P/E ratios and bubbles are, the flightier everyone gets.

10/. Not good to preface predictions with if, but IF the shit hasn't hit the fan in 2018 and 2019, and it's really hard to see us getting there unscathed, but IF there haven't been any serious corrections, unpicking Dodd-Frank will be making the whole deck of cards even more precarious - the DOW would also be north of 30,000, which boggles comprehension for many reasons, but primarily not through expansion of tangible assets.

So how do you get through this safely? Well Trump has to behave and not throw his toys out the pram for anything, ever. Inequality will still get worse. Progressives need to get voted in. The U.S. needs to join the rest of the world (except for Russia) again. International agreements need to make taxes fairer. Inequality is still going to get worse. Economic solutions to address climate change tend to be a bit abstract and ineffectual, but are slightly more relevant here. Societies need to become fairer and more inclusive. Migration will be an essential and truly positive benefit for all involved. Small changes for the next 20-50 years. Not drastic enough to cause upset, but drastic enough to make enormous change on a decadal scale. You really need to get a grip on healthcare costs while you're at it. No price gouging, etc.
Title: Re: Tax Cut Predictions?
Post by: dpareja on January 07, 2018, 05:04:44 pm
Seen regarding the tax bill from a GOP voter:

Quote
My tax situation improved greatly by the tax bill that was passed. By moving up the phase-out of the child tax credit to 400k+/year, I don't have to stash a large percentage of my income in tax shelters to get the full credit. Meanwhile, my total tax bill will be about the same as it currently is (give or take, depending on the specifics) so it wasn't a terribly expensive flexibility to get.

I was worried when I saw the early drafts, but the final bill was very well done. Nice job, GOP and President Trump!

Unlike a lot of stuff, That's not noise. That's real money for a lot of people.

So I pointed this out:

Quote
Considering that this tax bill raises taxes on the poor and middle-class by $4.5 trillion while cutting taxes on the rich by $6 trillion, and any tax cuts the former receive are temporary while the tax cuts the latter receive are permanent (until the Dems get into power again and reverse it all), and that every time this sort of thing has been tried before there's been a massive economic crash within a decade (what were the other common factors between those crashes?), well, it may not raise your taxes, but that makes you one of the lucky ones--for now.

Then I got this:

Quote
[Y]ou're spitting out numbers as though they were fact. Your sources may be right or may be wrong but it's a projection, with all of the margin of error that carries with it. Let's revisit this in a year, or two, or five, or ten, and see what happens (really all of the above as the more you revisit something the better you can eliminate the exogenous variables and draw a more accurate conclusion.

Also you're taking a flying leap of faith using a decade as your benchmark for causality. To my point above, a lot of unrelated shit can go down in that timeframe, making taxes a minimal, or perhaps even a mitigating factor.

No reply as yet to my reply to that:

Quote
But the decision is being made now, when what lawmakers (and anyone commenting on the law in question) have to go on is future projections and past experience. It's irresponsible, at best, to pass a bill that both of those indicate will have negative consequences and say, "Well, let's hope for the best." If things go wrong (as they have done in the past), we can't turn back the clock and make another decision.

Right now the best I can hope for is that this policy proves so disastrous, and this becomes apparent soon enough, that 2020, and the decades following, will be a repeat of 1932 and its following decades (except for that whole world war thing, but if that's going to start I expect it to begin before 2020, and for that matter be over before 2020 thanks to the weaponry we now have--but in that event there's a good chance I won't be around to witness any of the aftermath considering that I don't trust North Korea's aim), except that the Democratic Party won't be harboring a pack of racists.
Title: Re: Tax Cut Predictions?
Post by: Dappler on February 07, 2018, 02:30:44 am
Not sure I'll have the time to update as much as I want.

So what have I got wrong so far.

Nearly corrected the tax repatriation thing a few months ago when I found out that they're going to tax the overseas money whether you bring it back or not. The ramifications of this are moderately limited, and are only a one off gain, which actually adds slightly to current concerns (this week) of the inflation spectre in the early part of this year. (Apple's 350b number is PR and largely bullshit, largely what they would've done without this, included existing operations, and the expansion had been planned for a very long time, even before Trump was a twinkle in Putin's eye. Building a i-phone in the U.S. instead of Foxconn China would've raised manufacturing costs by about 2% of the retail item - something they make 70% profit on. People have been at apple to bring manufacturing home for 10 years, and as mentioned, this had nothing to do with the tax bill, etc.)

Did not dream the DOW was going to hit 26.6K, up > 2.5K in 6 weeks. Thought it was going to continue on it's gradual, increasingly weird climb. 30K (with conditions) was a 2020 prediction, not an April one. Wasn't a prediction, but sure missed it.

Did not think bitcoin was going to plummet this badly. Thought it also was going to depreciate (while being whippy) as faith and n00b investors slowly petered out. Fear of missing out on the profit taking seems to be a huge thing right now as the guys that bought it for pennies are hoping to cash in while it's still possible. Most are still hanging on hoping it gets a 4th wind or something and that lovely bubble curve is doing the rounds where, while they're currently in the fear cliff sell off part, it bottoms out and starts to appreciate again once it hits its theoretical true value, which has been nicely appreciating over time. The problem is of course that bitcoin has no true value, so where this goes is anyone's guess. There is something known as the price anchoring fallacy. Bitcoin seems like a bargain if you compare it to $20,000. It's a lottery win if you compare it to $2. People buying in now are doing so from misplaced greed bargain hunting or fear of missing the bottom, or are trying to stop it falling or are averaging down and the last category are going to lose their shirt over it. The fact that it's falling faster and harder than equities shows how feeble the 'gold safe haven' argument for buying bitcoin always was. Definitely triggered the it's going below 1K within 6 months start clause of my prediction though. May well be wrong. The anchoring fallacy may well win out. It may stabilise around 2. People may well ignore the extra regulations and the fact that there may be a clamp down on bitcoin mining because of how wasteful it is (no, nobody's talking seriously about that yet, and they mightn't have to if the price is in the toilet because it'll be uneconomic.) Still think it's going lower myself.

I got two other things wrongish (that I know of) and they're interesting. I don't think I have time to elaborate now. One is that I may have been overly optimistic in judging Trump's NAFTA stupidity to not be an issue. If he digs in he will lose, and most of the Republican based Trump bashing will be private (unless current Russia douchebaggery really alienates him from the party), but it could be more extreme than I dismissed last year. Not a problem I'd imagine, but still a thing.

The Mueller investigation is still going exactly as predicted. (Which means there's an increasing probability that Trump is going to go full Nixon on his ass and the DoJ.) Which being honest, he has a chance of surviving. The Mueller investigation - he has practically no chance of getting away from.

The 2nd thing I got wrongish was Yellen and the Phillips curve, and the market reaction. I thought rates would slowly offer a more appealing alternative choice and equities would stop being the only game in town slowly towards the end of the year. Instead the market got the barest sniff of a wind change, plotted in 4-5 hikes this year instead of 2-3, freaked the fuck out and pulled 2K off the DOW. More on this later, because there's a lot here, and because the deficit and Trumpism is going to play a story... (Dunno when I'll get there though).
Title: Re: Tax Cut Predictions?
Post by: Dappler on February 07, 2018, 05:17:36 am
So here's that bubble thing. (can't see a resize option readily available here, and not going to look hard right now, or look for a smaller version of this.)
(click to show/hide)

Note that the "bull trap" and "return to normal", follow the same shape as "despair" and "return to the mean". They conveniently omit the "bull traps" that occur on the way up, and similar things, but the whole premise to distinguish between idiotic buying in a dip, and idiotic selling in a dip, is that stealth phase trending line, where things stuck around their true value before the hype kicked in.

It's bullshit for bitcoin, because bitcoin is nothing but hype, even when it was selling for $5 in 2012. It was cute hype back then though. All those funny little nerds with their pretend currency.

That said you can make insane money in a bubble. (Just as you can in a boiler room scam.)
Title: Re: Tax Cut Predictions?
Post by: Dappler on February 08, 2018, 03:37:14 am
Still no time. Just popping in to say Trump is a goddam fuckwit. Yes, the moron who tried to start his own subprime loans company when Lehmans were about to go tits up, and Goldman sacks were bundling up Timberwolf into saleable packets of shit (not my word, theirs!). That moron just tried to call the stock market stupid for going down. Don't have time to unpack the reasons why his claim is stupid (later is the plan), but apart from that, its Republican heresy, because they're the dickheads who treat the market as a God and price is the ultimate arbiter of truth, no matter how much they externalise (or lie). So he just took a giant dump on them. Plus he also attacked "the smartest guys in the room".

The amazing thing is he actually stopped short of calling it treason. "A market that goes down when he releases good news" has to be a lot more treasonous than a Democrat that doesn't clap right? They just stole trillions from everyday hard working Americans.

God he's stupid.

And bald. The day he loses the combover and the orange, he's going to look like this.
(https://vignette.wikia.nocookie.net/starwars/images/a/aa/Anakinredeemed.png/revision/latest/scale-to-width-down/640?cb=20130420050100)
Title: Re: Tax Cut Predictions?
Post by: dpareja on February 14, 2018, 10:14:14 pm
I don't know how much this is tied to the tax cuts, but...

https://www.cnbc.com/2018/02/14/us-consumer-price-index-jan-2018.html

The US economy might just be about to come crashing down.

CPI inflation in January was 0.5%. That doesn't sound like much... but if the same rate is sustained over the whole year that would be inflation of about 6.05%. Then, prices go up, demand goes down, jobs are lost...
Title: Re: Tax Cut Predictions?
Post by: Lana Reverse on February 14, 2018, 11:29:33 pm
I don't know how much this is tied to the tax cuts, but...

https://www.cnbc.com/2018/02/14/us-consumer-price-index-jan-2018.html

The US economy might just be about to come crashing down.

CPI inflation in January was 0.5%. That doesn't sound like much... but if the same rate is sustained over the whole year that would be inflation of about 6.05%. Then, prices go up, demand goes down, jobs are lost...

And Trump alternates between putting his head in the sand and melting down on Twitter.
Title: Re: Tax Cut Predictions?
Post by: Id82 on February 15, 2018, 01:05:56 am
Now are they going to pull a Reagan and raise taxes or let the economy come crumbling down?
Title: Re: Tax Cut Predictions?
Post by: dpareja on February 15, 2018, 01:10:33 am
Now are they going to pull a Reagan and raise taxes or let the economy come crumbling down?

It's not just taxes. It's also the massive deregulation (which has been going on since Clinton with the repeal of Glass-Steagall).
Title: Re: Tax Cut Predictions?
Post by: Dappler on February 15, 2018, 03:56:57 am
CPI inflation in January was 0.5%. That doesn't sound like much... but if the same rate is sustained over the whole year that would be inflation of about 6.05%. Then, prices go up, demand goes down, jobs are lost...
Trump would have a Trumpgasm if inflation hit 6%. He's be sad it wasn't 10% because China had 7%, but all of that is why he's a fucking moron. As the article mentioned, the bump put annual inflation up to 2.1%, and that (paraphrasing) this is in the Goldilocks zone for economists, which means a decade of artificial stimuli might be about to unwind. [And that anything noticeably above 2% might force the Fed to fight inflation, and if Trump fights that, he's dumber than dumb.]

January data is too soon to be due to the taxes (and is a preliminary estimate only). Inflationary pressures tend to take a little while to trickle through the economy.

(And despite what Republicans wish, and despite that smattering of cash bonuses, that will not boost inflation or GDP, and will end up sucking money out the economy in the short term* with worse effects over the medium to long term)

*this one is debatable, because there is an increase in government spending earmarked over this period, and some of the money corporations save might trickle out to the economy through dividends, etc., but against this is the fact that irrationally bullish consumer confidence may pull back a bit and the U.S. is an economy which is massively driven by consumer spending, so if this dials back... (Not to mention it covers the discretionary spend. Do I feel optimistic? Will I upgrade my car, or hang on to my current model for another bit, etc.? (Ignoring all the other decisions and the science of separating people from their money, and that this is exponentially harder if people are unhappy with their current position or are afraid of their situation worsening.)
Title: Re: Tax Cut Predictions?
Post by: rookie on February 15, 2018, 11:14:17 pm
 Not a prediction, but I've noticed our taxes came down $20/ month while health insurance went up $50/mo with the copay going up to $30 per sick visit, wellness is still $20.
Title: Re: Tax Cut Predictions?
Post by: dpareja on February 15, 2018, 11:40:23 pm
Not a prediction, but I've noticed our taxes came down $20/ month while health insurance went up $50/mo with the copay going up to $30 per sick visit, wellness is still $20.

So between your public and private taxes (which is, let's face it, what health insurance premiums are), your tax bill went up, what, $30/mo with a reduction in health coverage?
Title: Re: Tax Cut Predictions?
Post by: rookie on February 16, 2018, 12:05:40 am
Federal, yes. But then we still have state and local taxes. Plus new taxes on stuff. Plus water doubled.

We've always had gov't health care. One upon a time it was very good. Sure, it was expensive but for what it covered (and if you remember how many dependents we covered) it was really really good. Then some GOP congressman (I don't remember woo) threw out a bill to put all gov't employees on the exchange. We'll ignore for now that ACA was supposed too be for those without insurance. Anyways, our premiums tripled. But the copays went down to $20 for a wellness visit (checkup) as well as sick visits. So while $30 isn't a lot of money at all, especially if you're at the doc's bee cause you have to be. But a 50% jump is still 50%.

Oh. While I'm on the subject, hospitals have a new(ish) trick I've seen since ACA. Once upon a time, you went to the hospital and got A bill. It might have been several hundred thousand because you were there 6 months. But it was one bill. Now, every doctor that comes to see you charges. For the last baby, there was a bill for; general admission, labor and delivery, aneste..anastes.. guy who knocks you out safely, NICU, and maternity. There's $20 a piece. Plus 10% of the bill. Plus parking (seriously). And my personal pet peeve. $45 for less than basic cable. The nurse comes in, turns on the tv and shows you how it works. Boom, $45. But I turned it off as soon as she left and it hasn't been on since. We're showing it was turned on during your stay, $45 for cable. I know I know. But that's the chicken shit stuff that really gets to me.

ETA: No, health insurance became a tax when it became a fine not to have it.
Title: Re: Tax Cut Predictions?
Post by: dpareja on February 16, 2018, 12:16:35 am
ETA: No, health insurance became a tax when it became a fine not to have it.

I would say that health insurance premiums are the price you pay for not going broke (in theory) just to stay alive. That's a tax by another name to me.
Title: Re: Tax Cut Predictions?
Post by: Dappler on February 17, 2018, 08:05:01 pm
Still don't have time to dig into this. Will probably also forgot 90% of the stuff that's been buzzing around my head that I didn't have the time to put down earlier, but let's start with Trump and inflation.

Despite his serial bankruptcies, paternal nepotism and welfare, Trump doubtless probably believes he's a great businessman even though all his truly successful ventures were someone else's pitch and someone else did all the work, whether it's his books, his brand licencing, his TV shows, etc. All of that was someone else. Trump didn't even like most of the ideas when he first heard them.

But his actual bricks and mortar relics - well if a property was worth 10M, he'd try and buy it for 3-4, with dirty tricks to boot if he could. He'd then swear to the tax people it was only worth 1, while telling everyone else it was worth 30-40. (Ignoring all his dubious subcontracting and hiring 'practices'.

And so in an inflationary market, while real estate tends to outstrip inflation in most markets, a 10M building would have to be worth 26.5M, 20 years later to keep pace with annual inflation of 5%. Trump would be the last person ever to think in real terms for anything, let alone economics, so inflation doesn't devalue things, it makes him look successful (in his own eyes).

And so when you look at the giants of economics of the 20thC, Keynes and his countercyclical management did win the sensible battles despite being terribly out of fashion by those that wanted to wish otherwise, but his main counterschool came from Hayek, and Hayek was actually motivated by his experiences in Austria post WWI, where the Central Powers countries were crippled by reparations and the status quo with all of its inequality was routed by hyperinflation, and all the old money and family fortunes vanished in a twinkling. Hayek blamed governance. But the spectre was actually inflation. And so you have Western macroeconomic interventory monetary policy for a very long time focusing on ensuring inflation stayed at manageable levels, and then you had Japan's largely demographically initiated lost decade, and then decades later the GFC, and the countries that had aimed to indirectly reduce inflation to 2% to maintain a healthy economy, suddenly thought a healthy economy meant they should indirectly try to raise inflation to 2%. And so here we are now, with markets flirting with 2%, a change in Fed chair, and the softly, softly, let's not spook the markets woman has gone. (Not to mention the Fed gets oversight for some of the financial measures the lobbyists want Trump to repeal) The first time Yellen wasn't doing a 'I don't understand why this isn't showing up yet', or her other phrases to calm things down and this happened. And Trump wants to pour rocket fuel on it.

Fucking moron. He probably still can't understand while certain 'good fundamentals' are bad for equity bubbles.

(too tired to write anything that makes sense, or to check I'm not full of shit)
Title: Re: Tax Cut Predictions?
Post by: Dappler on February 17, 2018, 09:13:00 pm
Which also connects to the deficit.

There was that debunked paper which doctored figures which claimed that once government debt reached 90% of GDP, things were just going to spiral out of control. They fudged the numbers to strengthen their case, but they do have half a point in the fact that a very large debt burden does actually become a thing!

The Trump 'budget' is insane. (And mean, and cruel, and illogical) And so the debt ceiling is an issue, and the annual deficit is an issue, and financing all that is an issue. You have Keynesian doctrine that dictates you save in the good times and spend in the bad times. You run deficits if you have to stimulate the economy, but if the economy is doing OK, run a surplus, pay down your overall debt and future proof your economy and invest in sensible forward looking programmes where the private sector is not looking to invest. Trump loves Norway's and Saudi Arabia's sovereign funds. Saudi Arabia's nearly evaporated when the oil price plummeted and they refused to increase their practically non existent taxes or decrease spending. Norway's however is doing fine, mainly because no one's talking about insane tax cuts (and they pay a lot) and hacking into it. Point being, Obama ran some horrendous deficits, but he had to. The bailouts were necessary. The economy was struggling and severely depressed, etc. People needed help, etc. Raising taxes would've made things worse (depending on how the money would've been spent, but it's a case of economy vs deficit, taxes are assumed to pay down the deficit, and extra spending vs a bigger deficit still is a debate independent of taxes.) Trump is potentially going to run a $1.2T USD deficit this year for NO REASON apart from making the filthy rich even richer, in a country that is now ranked #2 in the world for tax evasion, ignoring unethical avoidance. That is an insane number.

That puts government debt at > 100% of GDP in the near future. It puts servicing the debt at a higher cost than the entire US military within a decade, even assuming current incredibly cheap levels of repayments. (Something that will change if Trump has his way.) And so what does that mean exactly? That means US tax payers will be forking out many hundreds of billions of dollars every year just for the interest payments on the debt, let alone issuing new stuff. And who own the debt? Foreign countries. Corporations. Rich fuckers. Off shore tax havens. (Some retirees). The middle class will be working themselves to the bone so rent seekers can divest some of the risk in their portfolios and off shore hidden accounts can offer attractive annual rates of interest on deposits, without even looking at the beneficial programmes that money could have been spent on. The US is also about to hit the problem Japan had in the 90's in terms of demographics and retirees. Japan's problem was they all had super and payments in became payments out and equities took a huge hit, and there was a ton of bad debt and it had followed a decade of financial exuberance and success. The Nikkei 225 went up 700% between 1980 and 1990. It was about 15,000 for most of the 90's (down from nearly 40,000). It's going to add massive problems on the US deficit in terms of spending pressures, and also on assets if they do not keep their 401K's invested and cash them out.

All governments like cutting taxes, and like spending dollars. The Republicans are the government's that massively blow out the deficits for no reason though, even though Hayek would've hated that (and Keynes for different reasons, but they don't like Keynes). The US didn't have  noticeable deficit problems until Reagan, and now, thanks to Bush, and the GFC, inability to pass proper non-profit gouging healthcare legislation, and Trump, it's about to hit insanely scary, horrific to maintain, super uncontrollable levels, which will be too painful to ever think about dialing in. Small surpluses would have no impact, and if you need to find more than a trillion dollars in revenue every year, just to simply balance the budget, it's a world of pain to inflict, to not even put a dent in the problem.

So yeah, insane numbers. Child's play compared to what's coming by 2025. Particularly if the economy starts to retract.

It's a budget for kleptocrats by kleptocrats, with a bunch of malicious idealism thrown in for good measure.
Title: Re: Tax Cut Predictions?
Post by: rookie on February 17, 2018, 11:01:18 pm
Is anyone surprised by this? Everything he has done has been too profit personally. He's been trying for how long to put up a hotel in the city with the highest per capita of millionaires. He's trying to get one in Beijing as well, but with a different tract (bluster then befriend). The old saying goes follow the money. The man, and his cronies in office, aren't worried about a damn thing other than what they can personally get out of it.
Title: Re: Tax Cut Predictions?
Post by: RavynousHunter on February 17, 2018, 11:38:45 pm
So...Rapture?
Title: Re: Tax Cut Predictions?
Post by: Lana Reverse on February 18, 2018, 12:29:57 am
So...Rapture?

I wouldn't be surprised. While it probably wouldn't have the ideological underpinning of Ryan's utopia, I could see Prima Donald building a real-world Rapture. Or at least trying to.

Though I have to wonder who his Fontaine would be...