I dunno, guys, maybe hiring a guy who bankrupted 4 casinos wasn't the right way to go after all
As a kid in the 80s/90s who spent a non-zero amount of time in a mall, I just wanted to highlight how great this name is.
> Blinder and Watson reported that budget deficits tended to be smaller under Democrats at 2.1% potential GDP versus 2.8% potential GDP for Republicans, a difference of about 0.7 of a percentage point. They wrote that higher budget deficits should theoretically have boosted the economy more for Republicans, and therefore cannot explain the greater GDP growth under Democrats.[3] Since 1981, federal budget deficits have increased under Republican presidents Ronald Reagan, both Bushes, and Trump, while deficits have declined under Democratic presidents Clinton and Obama. The federal government ran surpluses during Clinton's last four fiscal years, the first surpluses since 1969. The deficit was projected to decline sharply in Biden's first fiscal year.
https://en.wikipedia.org/wiki/U.S._economic_performance_by_p...
None of these big swings between administrations had much to do with policy:
Clinton inherited the end of the Cold War and resulting “peace dividend”.
Obama inherited a Federal government already spending hundreds of billions to address the GFC.
Similarly, Biden inherited a Covid recovery budget spending an additional trillion or so.
And so much of it has to do with the influence of The Heritage Foundation.
When you break it up that way, there have been several fiscally conservative congresses + good presidency combos, most notably under Clinton where they reformed welfare, increased taxes and managed to get a budget surplus one year. The formula seems to be slim Democratic Party majorities in Congress with a Democrat president.
So yes it’s rare but good governance + rising tides can make a difference.
Clinton changed a 300b deficit into a 100b surplus. Obama reduced it from 1.4t to 500b.
Biden also slashed it but that’s a little unfair due to covid.
The last pre-Covid Trump I year of 2019 had a $984B deficit. After Covid, Biden’s final full year deficit was $1.83T.
There’s a non-zero correlation between any number of policy choices by both parties and the GFC or Covid, but it’s hard to see these primarily as anything but exogenous shocks.
Without that spending, the recession of 2008 would have been the same or worse as the depression of the 1930s.
IAE, nobody thinks it was a mistake to make a massive fiscal investment in 2008 to avert a depression, as you say. It’s hard to say that is a meaningful signal about the budgetary prudence of the GOP vs. Democrats.
Similarly, if Covid had hit in 2016, it wouldn’t have discredited Obama’s budgetary acumen if he spent a trillion on backstopping the economy against it.
I just hope we are not walking into another 2008, I think we are, but again my economic knowledge is just a crystal ball and a magic 8 ball :)
Imagine if all this capital investment in AI were instead being focused on solar build out. The vibes would be much more positive, but the return on capital for solar panels frankly looks paltry compared to what LLM tokens by the quadrillions can do.
> last pre-Covid Trump I
Sure, if you exclude the big increases, you can draw different conclusions.
GFC was not an exogenous shock, and even if it was, a) Bush was in office setting policy the prior 6 years and b) the specific response was not preordained (for ex: it is not part of the Constitution that rich people must pay lower tax rates than they did in 1982, that invariant is a policy choice).
Do you think lower high-income marginal rates caused the GFC?
> b) the specific response was not preordained (for ex: it is not part of the Constitution that rich people must pay lower tax rates than they did in 1982, that invariant is a policy choice).
We did not have to blow up the deficit (as badly) as a result of the GFC. That was a specific set of policy choices that the Bush team made, in part to preserve the capital gains tax cuts and low corporate tax rates. (If a corporation is a person for some purposes under the law and can claim some personhood rights, why are they not subject to the person's tax code?)
It is also a policy choice to tax capital gains, chiefly for very rich people, at a lower marginal rate than income earned through other means. It is not in the Constitution that our tax policy must favor the very rich.
One could imagine a world in which the response was along the lines that "this is a once-in-a-century crisis, so rich people and corporations will have to make the sacrifice of paying GOP Reagan 1981 tax rates for a few years to help us build a stronger foundation for the future."
Notably, CBO did expect (at the time) the Bush budget to increase the federal debt by roughly a third over a decade. It was well known and discussed at the time that the Bush budget would inflate our debt burden.
> pushed the deficit to a low % of GDP we’d kill for right now
Empirically, we would not. We are allowed to choose the entire composition of the House every two years, a third of the Senate is up for reelection with the same frequency, and the White House every four years. In no election of the last half-century or so has fiscal prudence been a major issue. If we would "kill" to lower the budget deficit, the easy first step would be to not re-elect the president who presided over the largest increase in the deficit in our history (by percentage: W Bush; by $: Trump).
As much as one might wish it were otherwise, voters simply do not care.