economics – Page 95 – Lone Candle

Rare win for Boris Johnson — but Brexit storm hasn’t passed

Posted on December 29, 2020 by Lone Candle

“In the very short term, however, it looks like plain sailing for Johnson. The deal, which will be subject to a ratification vote in the U.K. parliament on December 30, is highly likely to pass.

Some Conservative MPs, who have said they will study the deal in depth over the coming days, may quibble over details, but the overall shape of the agreement is — and has been for some time — one that represents a fundamental victory for Brexiteers. The U.K. will leave the EU’s single market and customs union. It will continue to manage its economy under rules similar to those in the EU, but if it wants to change those rules in the future, it has the freedom to (with consequences in the shape of tariffs).

Even on the totemic issue of fisheries, where the U.K. gave ground in the latter stages of the talks, none but the most purist Brexiteer could claim that the final settlement (a five-and-a-half-year transition period to a situation where the U.K. is free to decide who accesses its fishing waters) is not a major change from the status quo.”

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“Johnson’s claim during his announcement that there will be “no non-tariff barriers” to trade is not correct. The deal removes tariffs and quotas. It doesn’t remove mountains of new paperwork for firms looking to trade with the EU, as the government’s own copious sets of instructions for businesses testifies.”

Biden and Trump Offer Competing Tax Proposals, but Both Ignore Economic Reality

Posted on November 23, 2020 by Lone Candle

“In a world in which economic reality mattered to politicians, grandiose spending plans coupled with soaring government debt would pretty much preordain grim tax policy. But we don’t live in that world. In ours, tax and spending proposals are crafted based on their appeal to target audiences of voters, with no regard for balancing books or averting financial catastrophe.”

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“It’s necessary, though probably pointless, to emphasize that neither Trump’s nor Biden’s tax plans come close to paying for the federal government’s anticipated spending spree in the years to come.”

Does Modern Monetary Theory (MMT) Destroy National Debt Concerns?

Posted on November 8, 2020 by Lone Candle

Does Modern Monetary Theory (MMT) Destroy National Debt Concerns? SOURCES.

Posted on November 1, 2020 by Lone Candle

The Real News Podcast – Modern Monetary Theory – A Debate Between Randall Wray and Gerald Epstein The Real News. 2019. https://www.spreaker.com/user/therealnews/the-real-news-podcast-modern-monetary-th Is MMT “America First” Economics? Gerald Epstein. 3 20 2019. Institute for New Economic Thinking. https://www.ineteconomics.org/perspectives/blog/is-mmt-america-first-economics On Modern Monetary Theory

Why Trump lost his battle against the trade deficit

Posted on October 27, 2020 by Lone Candle

“the U.S. trade gap is on track to exceed $600 billion this year. That would be the highest since 2008, just before the global financial crisis.

The monthly deficit in U.S. goods trade with all other countries set a record high in August at more than $83 billion.

Trump has blamed the trade deficit on bad trade deals negotiated by his predecessors and unfair trade practices by other countries, but most economists disagree with that explanation.”

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“A variety of factors contributed to Trump’s failure to eliminate the trade gap, which White House trade adviser Peter Navarro predicted in 2016 could be erased in one or two years.

Overall trade remains depressed compared to year-ago levels because of the coronavirus pandemic.

But the massive U.S. government stimulus payments to businesses and consumers have helped U.S. imports recover faster than U.S. exports. That explains why the monthly goods deficit has increased from the average level of $73.3 billion in 2019.

However, even without the pandemic, Trump’s practice of piling tariffs on China and selected other products like steel and aluminum was never going to turn around the deficit, most economists agree.”

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” The large U.S. trade deficit is fundamentally driven by larger economic factors — like the fact Americans spend more than they save and have to borrow from abroad to finance the difference”

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“Trump’s $1.5 trillion tax cut in 2017 contributed to that problem by running up the U.S. budget deficit.”

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“Looking at trade in 2019, the last full year of data, the overall U.S. trade deficit fell by less than 1 percent from the previous year to $577 billion. However, the bilateral trade deficit with China fell by a much more impressive 17 percent to $345 billion as importers turned to other countries such as Mexico, Vietnam, Taiwan, South Korea, Japan and members of the EU.”

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““We would say one of the big failures of the Trump administration with respect to trade policy is the failure to address currency misalignment in any kind of meaningful way,” said Thea Lee, president of the Economic Policy Institute, a left-leaning think tank aligned with union groups. “Putting a couple of sentences into the deal, but without a clear road map as to how it’s going to be instrumentalized, doesn’t really do very much.””

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“Trump’s revised NAFTA agreement with Mexico and Canada does include strong protections for workers rights, which helped the pact win overwhelming approval in the Democratic-controlled House. But the fact that labor concerns were not addressed in the China agreement “just shows that the Trump administration is not driven by any principles in this area, but simply by political expediency,” Lee said.

The administration hails China’s agreement as part of the phase one trade deal to purchase $200 billion more of U.S. goods and services in 2020 and 2021, compared with the record it set in 2017.

But the data released on Tuesday shows that China is well behind on that goal. During the first eight months of this year, it had imported just $69.5 billion worth of U.S. farm and manufactured goods, compared to $80.2 billion in the same period in 2017.

U.S. farmers were hit so hard by Trump’s tariff war with China that his administration doled out more than $20 billion in emergency aid payments to help cushion the blow.

U.S. farm exports to China had reached as high as $25 billion annually a few years before Trump was elected. But they plummeted to $6.8 billion in fiscal 2019 after Beijing retaliated against Trump’s tariffs by raising its own duties on U.S. farm exports.”