David:
Both presidential candidates laid out their economic plans this past week. Both followed some party-line ideals, and both veered from reality now and then. I thought we might take a look at these plans, as well as some economic evaluations, and see what ideas are feasible, and which are not, and which messages resonate with us.
Doug:
Sure, we could pretend that this is a normal presidential election, and that we could discuss the pros and cons of each candidate's policies. Get us started!
David:
Both of them have taken a turn from Obama's policies on free trade. This is somewhat ironic in that it was one of the few points of bipartisanship that came out of the last few years. Obama and Congress both approved of moving the Pacific Partnership ahead. Now, both Clinton and Trump are ready to trash the deal and start at the beginning. This is most surprising from Clinton, who, as Secretary of State helped to negotiate that very same trade deal. Since Trump's message of protecting American jobs has resonated with blue-collar workers and union members, she likely felt compelled to change her mind to pander to those voters.
Doug:
That was a long story to get to the idea of "Clinton panders". I thought maybe you would end with "Clinton thought about the idea, and came around to a reasonable position." But pandering? Watch this, and then tell me who is the king of pandering:
Maybe you can let us know what are some of Trump's policies, because I haven't heard any.
David:
Let me know when you’re ready to participate. It’s only a discussion if you actually discuss something. In the meantime, I’ll keep outlining where I see their hits and misses.
Clinton had said the Pacific Trade Deal was the “gold standard” for trade deals, until Bernie Sanders showed up. She changed her position to try to grab some of his thunder, which was also the message Trump was, well, shouting. Now she’s against free trade. Until she’s elected and she no longer is against it.
Doug:
If we are talking about policy (rather than your spin of the issue) then I think you can simply say that Clinton is against the TPP. She has said that the details matter, and she is not against all free trade agreements. But maybe you can tell us some about Trump's policies?
David:
Both Clinton and Trump have declared war on any company that wants to move out of America.
Doug:
Declaring war! Sounds so exciting when you tell us stories! Continue!
David:
Clinton will fine them with an “exit tax”, while Trump will place a tariff on goods those companies try to import into the country. The correct answer is not to punish companies, but to create an environment where companies want to locate within the US, along with all the jobs they create. Lowering the costs of running a business, rather than raising taxes (which are already some of the highest in the world), we should lower them.
Doug:
Are you running for president? Whose policies are you discussing? It sounds like Clinton vs. Trump vs. Blank.
David:
Another place where Clinton falls short is in stimulating growth. Even Larry Summers, a progressive economist states that all of their progressive policies depend on growth of 4-6%.
Doug:
I would not describe Larry Summers as a "progressive economist." But what are Trump's plans for stimulation?
David:
You’d like to change the subject, rather than talk about Hillary’s policies? At least you aren’t trying to say Hillary is going to stimulate growth. I consider that a small victory.
Doug:
That is the difference between you and me: I don't see politics as winning or losing, but trying to make the country better. If Trump was running as a Democrat (see above video) against, say, Paul Ryan (or pretty much any Republican in congress), I would vote for the other person. Why? Because Trump is crazy. I do not trust him, and for good reason. I have no idea what his real agenda or policies are. I think Clinton's policies are well known, and obvious. And I agree with most of them.
David:
Trump’s policies will certainly create growth, according to analysts, but with an increase in debt. How much debt? It’s hard to tell, because it depends completely on how much growth develops. Clinton’s plans will, at best, maintain the growth at the current 1-2%. If she enacts further regulations, economists doubt we’ll see any increase in growth throughout her proposed presidency.
Doug:
You are certain that Clinton's policies will have a low growth rate (even though you are argue that this is a continuation of Obama's plans, which have worked out very well.)
David:
Obama’s economic growth is the worst since the Great Depression. Do you pay any attention at all to economics?
Doug:
Yes. And you are certain that Trump will have high growth, even though we don't know what his policy would be. You can see anything in anything. But rather than bloviating about what Trump's policies would do, maybe you can tell us what they are?
David:
I have been. Apparently only one of us will be discussing policy in this blog. I’m still waiting for you to join me. But it’s not just me who says Trump’s policies will stimulate the economy better than Clinton’s.
Both Clinton and Trump plan to spend more on infrastructure. But that’s what every president since Reagan has said, and they’re still spouting that economic solution. Nothing ever happens. Remember when Obama was going to spend a trillion dollars on “shovel-ready” jobs? Turned out there were not any of those types of projects available, and due to all of the red tape, those projects are still not available. Hillary has said she will “cut red tape”, but doesn’t say how she will do that, or even what that vague statement means. Will she shut down the EPA? Will she tell the Bureau of Land Management to allow roads to be built on government land? Will she eliminate review processes, that now can take decades? Doubt it. Trump says he will put a moratorium on regulations. That should allow projects to actually progress and create construction jobs. It should also provide a sense of confidence in the marketplace for small businesses to feel like they can expand.
Doug:
"Moratorium on regulations" is not a policy nor even something he can do. Presidents don't make laws.
David:
Regulations are not laws, my dear brother. Regulations are rules spelled out by the Executive Branch’s various agencies. Agencies may be authorized by legislators to enact certain legislative goals through regulations, but the actual regulations are developed by those specific agencies. The President can certainly put a hold on further regulations.
Doug:
You sound as vague as Trump.
David:
Now, back to the topic. Neither candidate plans to address Social Security, which spends more than it takes in (a recipe for insolvency within the next 20 years). Clinton actually want to expand benefits. Neither candidate has plans to address Medicare either, which will be bankrupt by 2028.
Doug:
No it won't.
David:
Perhaps we need to discuss addition, subtraction, and other simple math before we move on to economics. When you spend more than you take in, you lose money. If you have one dollar, you can’t spend two dollars, without making up that extra dollar. When a program spends more than it takes in, it runs out of money. If you only have one dollar, you can’t spend two. When a country spends more than it brings in, year after year, and it's growth stagnates (som taxes fall short), it can no longer pay out the benefits it promised.
Doug:
I suspect that at some time between now and 2028 we will have a Democratic congress and President, and they will be able to raise enough money to pay for all of our spending. Perhaps it will be as early as the next few sessions, thanks to Trump.
David:
I can sum up Hillary’s plans using the words she used in a single speech 2 months ago: She said she will make day-care more affordable, and yet in the same speech she also said she would make sure day-care workers get paid more. She’s a typical politician; She makes promises out of both sides of her mouth that just can’t both be true.
Trump on the other hand, changes his mind frequently. Too frequently for my taste. At least he’s started to give some speeches with more concrete ideas, and he’s begun to stick with those ideas in follow up interviews. But, time is running out for him to sell those ideas.
Doug:
Trump has no policies. But I agree that he is running out of time. Most reasonable people will agree that a plan is better than no plan. And Clinton has some amazing plans. The best plans. You are going to love her plans.
David:
Both of their plans fall short for me. Neither has a plan to address the deficit. According to many economists, Trump’s plan has the best chance to increase growth, and that seems to be the right road to take. Clinton follows a long tradition of Democratic economic plans: Tax more and spend more. A lot more. Not good.
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