No, Stimulus Spending Wouldn’t Be an Economic Vaccine Against the Coronavirus

“as doctors will tell you, administering vaccines to patients with weakened immune systems can be disastrous. Given the United States’ already perilous national debt and rising deficit, the White House and Congress should be cautious about spending additional money to avoid a coronavirus-caused recession—especially since the “vaccine” doesn’t seem like a sure bet.”

U.S. population will decline faster without steady immigration, Census report says

“Limiting immigration over the next four decades would do little to stop the racial diversification of the United States — but it could push the country into a population decline, according to a new report by the U.S. Census Bureau.

For the first time in a decade, the federal agency gamed out how varying degrees of immigration could impact the U.S. population in terms of growth, age and racial diversity and its labor force.

Its conclusions, experts said, underscore the important role immigrants play in keeping the U.S. population trending upward.

“We desperately need immigration to keep our country growing and prosperous,” said William Frey, a demographer at the Brookings Institution who analyzed the Census numbers this week. “The reason we have a good growth rate in comparison to other developed countries in the world is because we’ve had robust immigration for the last 30 to 40 years.””

“The population of American seniors — aged 65 and older — is expected to surpass the population of children under the age of 18 in every scenario, though higher immigration patterns would delay the inevitable”

Trump’s Budget Follows in the Footsteps of Giant Spenders

“during Trump’s first term, he displayed the same proclivity to jack up spending as his Republicans predecessors. The data shows that Trump increased defense spending in real terms by 18 percent, with an overall spending growth rate of 10 percent. Presidents Ronald Reagan and George W. Bush increased defense spending by 28 percent and 36 percent, respectively (and overall spending by 9 percent and 24 percent). Compared with their Republican counterparts, Democratic presidents Obama and Bill Clinton look frugal.

Unlike Bush or Reagan, however, Trump has had a booming economy, no new wars, and no terrorist attacks since his term began. This context makes the massive increase in spending, along with the $1 trillion deficit in fiscal year 2020, even more shocking. With no serious changes, the Congressional Budget Office projects that these annual budget deficits will stay well above $1 trillion in the next 10 years.

To be fair, the president does plan to balance the budget eventually—in 2035. To achieve this goal, Trump proposes some $4.4 trillion in savings over 10 years, which is a step in the right direction. For instance, according to Marc Goldwein at the Committee for a Responsible Federal Budget, this the budget would save Medicare $600 billion, reducing national health expenditures by almost $1 trillion. As Goldwein noted on Twitter, “That means lower premiums and out of pocket costs—don’t demagogue these policies!” Unfortunately, judging by the news headlines and reactions by Democrats in Congress, these savings are likely dead on arrival.

To achieve such savings, some very unrealistic assumptions would need to materialize. For instance, while the economy grew 2.4 percent in 2017, 2.9 percent in 2018 and 2.3 percent in 2019, the White House projects that the economy will grow at about 2.8 percent annually for a decade straight. The budget also counts on interest rates staying low, so as to not massively increase the amount of interest payments that will have to be made. The low interest rate, paired with the planned savings, would lower interest costs by $300 billion. Unfortunately, this is a mirage. According to the Committee for a Responsible Federal Budget, “Using more realistic economic assumptions, the budget deficit would be about $1.2 trillion (3.7 percent of GDP) in 2030,” as opposed to the $261 billion projected by the White House.”

“The plan is to cut projected spending on domestic programs by roughly $2 trillion. These “cuts” are mostly to the projected growth of spending increases, not reductions in the actual amount of spending. Still, to make the savings politically viable, the burden should be distributed enough to inspire a sense of shared sacrifice. Instead, the budget plans to extend the 2017 tax cuts at a cost of $1.4 trillion and increases military spending, making the cuts harder to stomach for some.

At the end of the day, and after much spilled ink analyzing the budget proposal, we can count on one thing: This actual budget won’t see the light of day. Instead, Congress and the administration will continue in the footsteps of those who came before them and increase the debt while pretending to be fiscally responsible.”

China trade deficit shrinks as deficit with EU hits record high

“the deficit in exports versus imports from China shrank to $345.6 billion, down about 18 percent from a record high level of $419.5 billion in 2018.

But the U.S. trade deficit in manufactured goods with all countries was relatively unchanged in 2019 at close to $1.048 trillion because importers turned to other nations after Trump hit China with tariffs ranging from 10 percent to 25 percent.

Some of the beneficiaries of that shift included Mexico, Vietnam, Taiwan, South Korea, Japan and members of the EU.

The trade deficit with the EU hit a record $177.9 billion in 2019, while the gap with Mexico was a record $101.8 billion”

“tariffs Trump has imposed on approximately $370 billion worth of Chinese goods have increased costs for U.S. manufacturers”

“That helps explain both the slowdown in U.S. manufacturing output and slight decline in the manufactured goods trade deficit in 2019”

“The U.S. usually runs a surplus in agricultural trade. However, that surplus shrank to $23 billion in 2019, from $26.5 billion in 2018, at least partly because of the retaliation that China and other countries on American exports imposed in response to Trump’s tariffs.”

“One bright spot in the trade report is the sharp drop in the oil and gas trade deficit, which fell to $29 billion in 2019, from $69.5 billion in 2018, because of increased U.S. production and exports.

The oil and gas trade deficit reached as high as $317 billion in 2008, but has fallen steadily over the past decade because of new production techniques.”

“Trump still is mistaken to believe that the trade deficit is driven primarily by unfair foreign trade practices or bad trade deals, economists point out. Instead, other factors, such as the size of the U.S. budget deficit and the strength of the U.S. economy play a much bigger role in dictating trade flows.

“The irony is the stronger the U.S. economy is compared to our major trading partners, like the European Union and China, the more likely it is the trade deficit will go up because we will have stronger demand,” Griswold said. “The vast majority of economists would say that’s perfectly fine, but it does put this administration in an awkward spot.””

New conservative climate plans are neither conservative nor climate plans

“Over the years, the terms “free market” and “limited government,” like so many conservative principles, have devolved into little more than rhetorical tics, bits of sloganeering that bear no resemblance to actual conservative governance.

What conservatives seem to have decided is that regulations, restrictions, or limitations — anything that might upset or inconvenience the corporations generating greenhouse gases — are the bad kind of big government and a bad way of picking winners and losers. Government subsidies, tax credits, and grants — anything that might benefit big corporations — is the good kind of big government and a good way of picking winners and losers.”

“There are plenty of models that show we will need carbon capture (both industrial and natural) to supplement other efforts to reduce emissions. We probably can’t hit our mid-century targets without it.

But there is no model in the world showing emissions falling fast enough with nothing but carbon capture, with fossil fuels continuing their current headlong expansion.

The fossil fuels that remain behind after deep decarbonization, the ones that still need their emissions captured and buried, will be a small vestige of the current fossil fuel regime. That is what every credible model shows. That is the cold, hard truth at the heart of the climate dilemma: There is no avoiding the imperative to reduce fossil fuel combustion and the social and economic disruptions that come with it.

Current Republican efforts to feign climate policy conspicuously fail to grapple with that truth.”

The real state of the union

“If you didn’t know American politics had been turned upside down by Trump’s election win, nothing in the macroeconomic data would suggest that anything at all happened in January 2017”

“That’s not to deny Trump any credit. He made a sensible selection for Federal Reserve chair and has presided over a healthy dose of fiscal stimulus, and his trade policies haven’t been as disruptive as the most alarmist critics warn. But at the same time, his tax cuts haven’t delivered the kind of investment boom he promised, and in general, all his record-setting economic numbers are continuations of previous trends.”

“Under Trump, we have seen a sharp slowdown in net immigration that has helped reduce US population growth to a trickle. The foreign-born share of the population, however, is not falling despite the immigration crackdown because American women are also having fewer babies.”

“The number of babies women say they’d ideally like to have isn’t declining; we are just seeing the gap between ideal fertility and actual fertility get bigger and bigger each year. According to surveys, the main reason is the high (and growing) cost of child care — a problem that a “good economy” alone doesn’t fix, since child care is so labor-intensive.”