I agree completely with the analysis. But there is exactly zero chance that any of this will happen, right?
Let us remember that it was very recently that Biden decided to do student loan forgiveness, which is the worst possible policy in current economic conditions (increases deficit, increases spending, bad distributional effects, no long term structural benefit).
He seems incapable of doing anything even remotely unpopular, and what Matt proposes would be *very* unpopular.
I’d say the chances of a return to deficit hawkery now are greater than the chances in 2010 that congress would decide to take advantage of negative real interest rates to lock in a bunch of debt to pay for a major infrastructure package.
>He seems incapable of doing anything even remotely unpopular, and what Matt proposes would be *very* unpopular.
To be fair, Matt has also been beating the Popularisim drum for well over a year now. Enacting unpopular tax policies probably seems like political malpractice if Biden & Co. are seriously subscribing to this theory of power.
Agreed. Populist economics is the name of the game on both sides of the isle. No one is going to risk losing to do something responsible that would benefit the economy.
I read the abstract and a bit at the top and it seems to be saying that research costs on drug X don't correlate with cost for drug X.
But that doesn't necessarily mean they don't need the higher costs to recoup R&D.
1) Plenty of drugs don't pan out in trials. So those R&D costs have to be recouped somewhat. There's no particular reason why the drugs that have higher R&D costs have to be the ones that recoup this loss.
2) You'd certainly expect that more lucrative potential areas would be the focus of higher R&D costs, but sometimes you get things like Viagra, where the medication isn't used for what it was initially developed for.
===
That said, I'd expect _some_ correlation - it makes sense to be willing to invest more R&D in an area where you expect to be able to charge more. That is, if you don't expect a drug to be able to sell for $1,000 a dose, then you won't invest R&D in it if it will only be profitable at $1,000 a dose.
Conceivably Congress could write legislation that had some contract-like characteristics, no? Even something as simple as "after X years, Y provision becomes effective" (which is already a common feature of a lot of legislation). Admittedly there would be issues with preventing future parties from rescinding them, but it seems like it's a start.
While I agree that now would actually be an appropriate time for austerity policies, I don’t think the politics will work out. Any policy that seeks to decrease the consumption of a significant enough portion of the electorate to affect inflation is going to be politically toxic. Just look at how we can’t even contemplate increasing taxes on anyone earning less than $400k/year.
I don’t think it matters what combination of tax increases and benefit decreases compose such an austerity policy. The simple fact that a non-trivial number of voters will see a proposal to decrease their spending power will lead to massive political blowback. I just don’t see how any politician could propose or support such a proposal without consigning themselves to future electoral defeat.
Although I do see some potential if there is some sort of external force constraining our options. For example, the new UK government has been forced into a U-turn when their hastily developed tax cuts and financial support for household energy bills led to turmoil in their government bond market as well as a rapid depreciation of their currency.
I guess something similar could happen in the US. My understanding is that a lot of the 90s concern about deficit was focused on “bond vigilantes” causing financial turmoil if investors lost faith in US government debt. E.g., Carville’s famous quote about wanting to be reincarnated as the bond market because, “You can intimidate everybody”.
Britain has much less room for maneuver because 1) the pound isn’t a full blown reserve currency and 2) it imports enough stuff that any big fall in the pound is inflationary. The U.S. has the huge advantage of being able to conjure a reserve currency out of thin air- an advantage unlikely to wither when Europe is at war and far less stable than the US. The U.S. is also less dependent on trade, so a falling dollar is less inflationary than a falling pound.
The reason that the US dollar is rising against other currencies has little to do with it being a reserve currency and everything to do with the fed having raised rates far more than others. E.g. Fed funds rate is over 3.25% while the BOE is 2.25 and the ECB rate is 1.25%
The Euro could be a coequal reserve currency if (and only if) Putin is contained. As long as European governments print money to outbid each other for natural gas, the Euro will be the new lira.
The decline in the stock market has already wiped out $10 trillion of market cap, more than the $7 or $8 trillion the federal government injected into the economy during the pandemic. Yet inflation persists. Putting money into the hands of poor people is more inflationary than putting money into the hands of rentiers. Pandemic benefits were spread much more evenly than stock market wealth, ergo they created buying power in a way a fat stock market simply doesn’t. A good stock market pushes up prices of high end real estate and room rates at fancy hotels. Pandemic benefits pushed up prices of cars, TVs and normal widgets. An aside— pasta prices have increased over 50%, but that’s because Ukraine and Russia are both grain exporters and grain commodity prices have almost doubled. Next year may bring a historically profitable harvest in Saskatchewan.
Yes, I was thinking the same thing. The inconvenient truth is that more money in the hands of rich people doesn't contribute much to inflation - at least inflation in things that ordinary people consume. It, instead goes to higher prices for stuff like luxury estates, private jets, and financial assets, from stocks to bitcoin.
If you really want to use taxation to fight inflation, you have to target the tax at ordinary people and lower-income people, precisely where it would cause the most pain, both real and political (and also why taxation to fight inflation might not be such a good idea in the first place).
Overall there was a huge run up in prices of "luxury" and investment items in the last decade plus....art, collector cars, real estate, physical and financial investments, crypto, etc. just as Eric states. Those gains mostly circulated among the wealthy, who doubled down again in ever more varied investments--this is/was often referred to as the "Everything Boom".
During this nearly unprecedented decade-plus bull market, inflation was near-nothing... but try pricing a classic Porsche in 2019.
Actions: $1,000B Infrastructure Bill. A $1,900B ARB. The $740B "Inflation Reduction Act." A $500B giveaway by "forgiving" student loans. Over $4T.
Results: real wages are down 6% since Jan. 2021; the S&P500 is down (18%) YTD nominally; Inflation is at a 40-year high. The Strategic Petroleum Reserve is at its lowest point since 1984.
Matt's proposal is to "drain the wallets of those who can most afford it". Based on results to date, the President and Congress are draining our wallets as fast as they can.
Unless your salary is keeping up with the higher costs from inflation, you are quite definitely poorer.
The cause of inflation is more dollars "sloshing around", yes. But unless they are sloshing into your pocket it is definitely a drain on personal finances.
I think it is. There is a clear wealth effect to spending rates, and if your net worth is cut by 20%+, you will most definitely spend less. The government doesn't get the money, though.
Not in the sense that matters for the current discussion. It doesn't actually remove cash from circulation in the way that stops inflation, the way an actual tax does.
Beyond Binya's admittedly relatively minor point below, I think it also worth mentioning that the previous administration also tossed a similar sum of money into the economy under similar circumstances.
Between the two we've overshot, yes, and I agree that Biden is slow to pivot to face that reality due to pressure from the "We disbelieve in economics" left flank of the party.
But... I think we also likely agree that the effects of this overshoot are less harmful than those stemming from the lost decade which followed our undershoot in 2008-09? I'd rather face today's circumstances than what we dealt with between 2009 and 2014 or even 2018.
We need, and MY has often advocated for, structurally-embedded, systemic, *consistent* ways of ratcheting fiscal stimuli up and down, rather than the error-prone, ad hoc, scattershot methods of today.
That said, from a purely policy angle I don't really find GOP control over the House and a resulting period of deadlock all that harmful. The IRA makes most of the necessary investments to get the US on a path to decarbonizing not just the electrical grid but also many forms of heavy industry, the Democrats have taken China's threats seriously in a way the GOP refuses to despite their rhetoric, the infrastructure funding will allow us to get ahead of the deferred maintenance backlog for the most part... there's not a great deal to be done in the next year or two which cannot be done in Secret Congress or isn't a matter of foreign affairs. And I don't *think* the GOP is going to give in to its MAGA-dumbasses and pull support for Ukraine, though I might be wrong.
My only real concern is the very possible danger that they will win power in the 2022 and 2024 elections and then succeed in saying "No backsies" to the electorate.
Eventually that will blow up in all our faces, not just because of the moral issues surrounding an authoritarian herrenvolk democracy, but because short-circuiting the normal thermostatic nature of American politics will inevitably end in violence. They'll become accustomed to being the rightful party of government, and there's no way that, in 2036, or '40, they'll give up power. Not even if they lose in a landslide so big that it overwhelms even their gerrymandering and structural advantages in the Senate.
And then *everything* comes apart, because the second 50+ percent of the populace realizes its voice is never going to count again, there's nothing holding the center together.
Unfortunately, the Democrats don't really have the ability to restrain their loud-mouth tribalists, so they can't assemble a broad coalition to consign the current iteration of the GOP to the wilderness long enough for the nutjobs to burn out and their numbers to dwindle as they did in the two decades after 1932.
I'm not sure *anyone* has that power anymore, in the age of social media amplification and global communications.
Regarding your first three paragraphs: The previous administration tossed money into the economy, but not nearly so much and, importantly, the circumstances were not similar at all. Once the vaccines became available in late 2020, combined with the unwillingness of the populace to keep major parts of the economy shuttered, the circumstances changed dramatically. But the Administration wanted to spend now that they had a trifecta in the House, Senate and Presidency. So spend they did.
Even with the gaslighting about "transitory", we could all see inflation was coming. The Fed had to see it, even if they chose not to do much about it. Even with the evidence, Biden still chose to initiate a $500B giveaway to student loan borrowers.
Address the risks around 2024 if and when it appears they might come to fruition. I still hope (and expect, frankly) that Trump won't run again. In the meantime, there is the election happening in 3 weeks that only affects Congress.
Eh, hard, hard disagree on the first paragraph. The GOP has, every chance it gets, handled discretionary spending like a drunken sailor to a far greater extent than the Democrats have, since long before I was born. Goldwater was the last GOP candidate to have any sort of commitment to basic fiscal probity. Nixon then leaned on the Fed to avoid rate hikes and set us up for the latter half of the 70's in the same way that Trump helped set us up for today. Since 1968 the Democrats have been the only real choice for *occasional* fiscal sustainability, even if they do it the wrong way around from your perspective.
As for the second, agreed, and I have structured my investment strategy around this. Not just because of the momentary circumstances of 2021, but because unless we actually start paying our way there'll be much more where that came from. Too much more.
In the 50 years after WWII we lowered our debt to GDP ratio by close to 100 points; a third, roughly, was paid off, a third was grown out of, and a third was inflated away. Absent much more rapid immigration or technological development, we'll not be growing our way out of our existing structural deficits, so the only ways that this game ends are to either vastly increase taxes without a commensurate increase in services, or allow a prolonged period of high inflation.*
The former is absolutely a political impossibility. It will not happen. No chance in hell. Which leaves the latter. And while that might take 30 years to play out, it will indeed play to the end.
That, as I said elsewhere, means that rental real estate purchased with fixed interest rate debts is basically the only game in town. If I'm wrong it performs no or little worse than equities, if I'm right it's the only possible investment with any sort of return over the next 40 years.
As for the third paragraph... absent a sea change in the current climate the GOP *will* win fair and square in 2024 whether with Trump or someone else, and by 2028 a nice recovery will be ticking along to keep them in power. As long as they're winning fair and square there won't be too much to be said on the topic.
We'll just have to wait and see what things look like in 2032, when they'll have to face the very real prospect of losing.
Will the party tolerate it? Given what we see today, I say no way in hell. They'll tweak the rules in places like Wisconsin or Pennsylvania to make sure that gerrymandered state legislatures have the final say on Electoral Vote allocation, or at least implement the Maine Rule if polling looks bad, use state officials to toss ballots in close races, and cling to power by any means necessary. And the Supreme Court will rubber-stamp it top to bottom, provided even the slimmest of real legal justifications that Trump's "crack team" was too stupid to proffer in 2020-21. How will the voters respond to that? *Maybe* with enough virulence to give the Democrats a bulletproof trifecta to enact electoral reforms in 2036, but I doubt it. Not unless the GOP fucks something up very badly in the interim.
No, my bet, if the GOP walks down this road, is that they'll have to fail as badly as the Tories are in Britain to push the electorate into a 55%+ landslide sometime in the 2040's, and then they'll try to steal even that election.
There are no actual conservatives over there anymore, or the meaning of the word has changed beyond all recognition, you know this as well as I do. The GOP going forward is going to be nothing but all the worst Longist tendencies of the Southern New Deal Democrats, with none of their restraining or moderate virtues.
*There's always the choice of an outright default, but presented with that option the Federal Reserve will absolutely allow inflation to run at a breakneck pace for a long time. The worst-case scenario, 10%+ inflation for a decade, is a tenth as bad as a sovereign default would be.
Ehh, maybe the world ends before then, or the GOP mismanages a financial crisis so badly that it's consigned to the sidelines like under Hoover, but if things tick along in more or less the manner they have since 1980, which I think is a fair bet for the half-century from 2020 onward, then there's nothing to knock anyone off this course.
2024 and '28 seem near certainties at this point. There is virtually no chance of getting the coming recession over with before November, 2024, and that all but ensures it will be over and done with by November, 2028.
Which leaves us to guess at the shape of 2032 and '36, and there doesn't seem to be much of anything to shift either party off-center from where they are today.
The Democrats will perhaps be mildly more moderate than they were in 2020, but the left/woke/tribal grouping is too large to effectively sideline, and it will continue to prevent them from assembling a long-term natural governing coalition. The GOP's incipient populism is still a sham and will be well past that point, which means they won't be able to do so either.
Thermostatic politics dictates the GOP will lose one of those two years, but its structural advantages mean the loss will be narrow as in 2020. The temptation to resort to changing the rules or tossing electoral votes to squeak by for another term will be nearly irresistible, certainly when they've now convinced 70% of their base that they'll be saving democracy instead of killing it.
Might things be completely and utterly different in every way? Sure. But this is the scenario about which I'm worried, even if it's only a 20-30% chance.
I think your fears make a lot of sense, with the important caveat that it is *really* hard to see where things will go in 10 or 20 years. Also, while the Court is quite right-wing, GOP-appointed judges have thus far mostly been disinclined to do the party's bidding when it comes to electoral shenannigans. So I'm not sure they'd be a rubber stamp.
That said, I wouldn't write off the Democrats in 2024. One of the reasons why I'm not all that bothered by the Republicans taking the House this year is that I think it could push Biden toward the center, which will improve his odds of re-election. Also:
-I think head-to-head polls mostly show Biden beating Trump right now. Yes, it's two years out, and the margins generally are not high enough to forestall Trump prevailing in the Electoral College. But it does show the Dems have a real chance.
-Look at the midterms. We've got high inflation, a recession looming, and a Democratic president with a ~40% approval rating and...it's an open question as to whether the GOP will take Congress, even though the Dems have razor-thin majorities. And the thermostatic tendencies of politics favor the party out of power. This should be a wave election! Even if the polls are underestimating GOP support and they take the House and Senate, it's not gonna be that. They're not gonna gain massive numbers of seats.
I honestly think a lot of people look at the Trump Show and, even if they don't particularly like the Democrats, think "oh God, not *that* again." Now, if the GOP is smart enough to nominate someone other than Trump, it's hard to see them losing in 2024 as things currently stand. But, as the cliche goes, two years is a long time in politics.
Get your facts right. The $740b in the IRA was the revenues increases. The spending was about $510b. It was a significantly deficit reducing measure.
Mistakes were definitely made with the earlier measures. But considering what a disaster the lack of stimulus after 2008 caused, and the curveball Putin threw the global economy, I'm not sure it's such a bad outcome. The S&P 500 is pretty much where it was prior to COVID, adjusted for inflation.
My sincere apologies. You are right. The correct number is closer to $3.5T in total.
I double-checked my other items to make sure I didn't make a similar mistake. The falling real wages, lower stock market, inflation at 40 -year high and SPR numbers are correct.
I didn't mean to nitpick. I get that $200b in the context of $3.5-4b is not that much. I guess my point is, Biden is trying. He made an honest mistake over-stimulating in 2021, borne of the trauma of 2008. Infrastructure had a lot of R votes, infrastructure is almost as bad as defence for causing congressional largesse
My perception of student loans is Biden's role making it smaller. He certainly got enough heat from his left for "only" doing $500b. Vicious attacks made against him (racism etc) over it.
If "Biden is trying" results in bad economic results, why not expect him to course-correct? The student loan forgiveness might be less than his left flank wants, but he isn't obligated to do ANY of it at all. It is a Presidential Order, and he can just decide not to do it.
That he isn't making any course correction tells me that the results we've seen are what we should expect if he and the Congress stay the same. Maybe that is just my little version of thermostatic politics in action.
IRA was a course correction! $200b deficit reduction!
I think if you look at history since the Reagan Revolution, the deficit goes down most with a Democratic President / Republican Congress, and goes up the most with unified Republican control. We're probably about to move into a Democratic President / Republican Congress, I wouldn't be surprised if the deficit does come down a little, which I regard as a good thing provided it's done in an intelligent way (optimistic perhaps).
Hindsight is 20/20, and in hindsight it's obvious there was too much stimulus.
However the structure of the stimulus bill was criticised in advance (including by Matt) for not being designed as an automatic stabiliser, instead of the lump sum design it used. Had it been done that way, then as the data came in better than expected, its size would have automatically decreased from the $1.9t.
I don't know enough about the others to comment if they could have been structured better
I actually think why there isn't interest in deficit hawkery is quite simple - the mental model that would say that deficits should grow in 2010 and but be cut in 2022 is a keynesian demand management one. But most people find the idea that the deficit should be used be used to put a floor or ceiling to economic growth weird and scary. So we always get pro-cyclical fiscal policy - as economies enter recessions and government spending on welfare increases people demand cuts, as economies get hot and expenditure on welfare falls people become complacent about the deficit. This is the big objection to keynesianism - that it fundamentally becomes an excuse to spends lots of money during recessions which will never be repaid
This is exactly right. The fact that the self described Keynesians are very loud during recessions and quiet during boom times perfectly illustrates it.
House Republicans have said that they won’t vote to increase the debt ceiling if they have a congressional majority unless there are serious cuts made to a variety of entitlements. There’s your deficit hawks.
Are those people actually deficit hawks? Don't they also want to cut taxes? I submit they will cut taxes and increase the deficit over and above any entitlement cuts they manage to pass.
The optimal strategy is not to negotiate with terrorists. That was Obama's conclusion after Republicans last pulled this stunt 2011 and I think he's right. Politics is a repeated game, if you let Republicans extract massively unpopular concessions by threatening to blow up the US economy, they will keep doing it. Especially over something as dumb as the debt ceiling. All it does is pay for spending Congress already approved.
I'm hopeful Democrats have wised up sufficiently to either finally cancel the debt ceiling (unlikely) or at least it raise past the 2024 election, during the lame duck period after the mid-terms.
The optimal strategy is to just abolish the debt ceiling in the lame duck session before Republicans get the chance to extort concessions to raise it.
Anytime you have these must-pass bills to avoid catastrophic consequences, it turns into a predictable game of chicken, and whichever side can credibly seem crazy enough to actually allow a debt default gets to extort policy concessions from the other side. The whole process is dumb and entirely preventable.
Matt seems more jazzed on raising taxes on the upper middle class than the rich. We consume a large majority of our incomes, so cutting them would cause disinflation.
I'm not opposed to raising taxes on the upper middle class (who I guess I was referring to as "rich" in my comment). I'm just saying that UMC people consume a smaller portion of our incomes than lower income people, so if we're primarily concerned with inflation then a tax hike across the board will be more appropriate than a tax hike targeted at people who it won't affect too much -- because it affecting people is the point.
You're right, Matt specifically says to drain the wallets of those who can best afford it. So it's clearly a fairness consideration, if you want to affect aggregate demand, which is what we're talking about here, lower and middle income people are more sensitive to changes in their spending habits.
And Matt knows that, but it's not his preference. But I think the economic impact is less differentiated than Matt does between a fiscal solution and a monetary one. The baseline is you need less aggregate spending, if UMC people cut spending enough or interest rates pummel interest sensitive sectors the goal is to cut spending enough to induce "slack" in the economy.
This seems more like a question of values to me. Raising taxes on the bottom half of the income distribution might have a bigger impact on inflation but would also entail a bigger hit to living standards for those people. Like, you could wind up with situations where people can't afford basic necessities. You can disagree, but I don't know...I think that's bad.
Whereas raising taxes on the upper middle class probably means fewer vacations, less dining out, you keep the old car running longer, that sort of thing. That might have a somewhat smaller impact on inflation, but it would still have an impact (a lot of spending goes towards that stuff!) and it seems more humane to me.
Again, you can disagree, but it's not about facts vs. ideology, it's about balancing different goals and values against each other.
UMC people have a marginal propensity to consume if at least 85%, possibly higher. The effect on aggregate demand of depriving a UMC household of a dollar isn’t so different from doing the same thing to a warehouse worker. It is the truly rich who have a low marginal propensity to consume, like under 50%, sometimes under 10%
For someone with an income of $200-400k per year, 85% of disposable income being consumed seems incredibly high. Especially given that many of these people are getting sweet deals on housing, having locked in long-term cheap mortgage rates during the market bottom a year ago.
People may have gotten sweet deals on mortgage rates, but interest rates and prices are over the long run inversely correlated. Which is to say, the "cheap mortgages" they got were for very expensive homes.
Maybe your sense of time is weird, but a year ago the market was not bottomed, it was in the middle of a huge bull run that ended in late December/January. In other words, it was more like a market top.
If you are referring to the real estate market... you clearly were not trying to buy a house a year ago. In hot markets people were offering 20-40% over asking prices, waiving inspections, paying all cash, etc. It felt like you could not buy a shack with no electricity, much less a house.
I think the UMC is in a sweet spot where we still consume most of our income, and there’s a lot of us (unlike the really rich) but we don’t suffer too much from decreasing consumption and have enough money that you can get as much from 10% of the population as you could from the lower 50%.
I once had it put to me by a *very* sharp acquaintance that the UMC were arguably the optimal consumer to have in mind when it came to crafting a lot of policy by dint of the fact that they were rich enough not to have consumption patterns that were dominated by high time-preference, but not rich enough that consumption was completely abstracted from income (and to a lesser extent wealth) in the way it was for the ultrawealthy.
Also the optimal people to target for donor asks as a political candidate. You have to be rich enough to feel like giving out a few hundred dollars to a lost cause like Jaime Harrison or Amy McGrath, but numerous enough that those hundred here and hundred there add up to real money. The fact that individual donations are capped at $2,900 means there’s really no need to target multimillionaires.
While I think MMT is a broadly idiotic idea (Noah Smith had some good posts about why), what they get right is that the focus should be on real resources rather than money. That means stimulus when inflation is low and austerity when it is high. Right now, that means that taxes and interest rates have to go up to cut spending power.
In a UK perspective, the recent regressive tax cuts (now rescinded) were one of the most idiotic plans that could ever have been made. Much as in the US, about 10 years ago an aggressive economic stimulus plan was both achievable and sound but it wasn't undertaken. A real opportunity was pissed away.
Agreed: the concept of MMT has always struck me as correct in a very banal, factual manner, but the people who identify under the banner of MMT never follow through with a major half of the concept.
I think in the 2000-2015 period, the people in charge had come of age in the 1980s, when inflation was the big problem. But now many of the people in charge came of age during the period when deficit hawks were constantly increasing unemployment.
People’s intuitions are developed at one point in the cycle, but since the cycle is several decades long, they often then use those intuitions at the other point in the cycle before they really internalize that these intuitions aren’t always right.
I remember reading how a lot of policymakers in the 70s grew up in the 30s and really didn't want to raise unemployment. People always fight the last battle.
I think there's probably something to this, but given the average age of Congress, I'm not sure there's a real distinction to be drawn between the people in charge in 2000-15 and those in charge today, at least at the legislative level.
It looks like the average age of congress was about 50 in 1989 and 60 in 2017. That still means that the average birth date moved 20 years forward over 30 years. So I'm guessing that in 2020, the average birth date is something like 12-13 years later than it was in 2000.
In any case, although Alan Simpson and Erskine Bowles are apparently both still alive, they're both long-retired, and there are current cabinet secretaries who were in elementary school while they were Senate Minority Leader and White House Chief of Staff respectively.
We need broad based tax increases. Matt’s suggestion doesn’t work, and it’s illustrated by how we talk about stimulus. When stimulus is limited to lower incomes, the logic given is that the rich don’t spend all their money anyway and would just save it, while lower classes spend more immediately. Higher multiplier. But in this case, we want the reverse, so raising taxes on just those making $700k a year will do nothing to slow aggregate demand.
As Mitt said, 47% of Americans don’t pay any federal income tax. It’s a hard political decision, but a broad based tax increase would be fair and help reduce inflation. We don’t need to balance the budget completely, but setting the US up on a sustainable path now will give us flexibility in the future.
Hopefully Biden can cut a grand deal after the election.
rather than cutting disability payments, hire more administrative judges to do a better job of deciding who gets them. the standard for federal disability, unable to perform any job that exists in substantial numbers in the American economy, is actually quite harsh
I read a big story a few years back about how Republican-run states were pushing people onto disability to get them out of basically any state-run welfare / unemployment / etc. That way they could 'end entitlements', refuse Medicaid expansion and cut taxes while trumpeting low unemployment (because disability recipients aren't counted as unemployed), but in reality they were just transferring the burden to states that are net federal tax payers. The reporter found some small towns where some staggering percentage of working-age men (like over half) were on permanent disability for 'back pain' or some other vague injury.
The take home message was that, because these programs are administered at the state level, it has turned into a hostage situation where state governments more or less threaten to take away benefits from the poorest and truly disabled if the feds ever try to to cut or adjust disability benefits. The irony was that many of the recipients preferred to work for a living, but that the job market in their towns was so bad that it was either that or be unemployed with no (or meager) benefits because the state programs had been gutted. So you had Republican politicians talking out of both sides of their mouth, slamming entitlements at the federal level while blocking entitlement reform to benefit Republicans at the state level.
I'm not saying that Democrats don't play similar games, just that glaringly obvious sources of waste often turn out to be politically impossible to eliminate for the dumbest possible reasons.
There's no way this will change. If it did it would send rural populations spiraling even faster than they did 2010-20, as people simply *must* leave to find work, or literally starve.
The GOP has *no* interest in genuine reforms here, because it would be electorally devastating to a majority that's likely to be held by blatant gerrymanders in states like MO, OH, TN, and TX which rapid urban growth would break.
Which brings me to the hottest of hot takes: let the GOP burn Social Security to the ground both for the short-to-medium-term backlash and because it will do much the same to their gerrymanders.
If we really wanted to play partisan over patriot, we could simply let them do what they want for a decade or two. That'd be enough to discredit them for a good, long while.
Downshot is, we'd likely need to fight a (hopefully small) civil war to boot them out even after a massive electoral landslide.
A bit of a tangent, but over the weekend we drove 20 minutes to visit a farm that has a pumpkin patch and other stuff for kids (it was a lot of fun). If you had passed out and woken up there, you'd think it was the middle of nowhere—there wasn't even cell phone coverage to speak of. On the drive over, the lawn signs turned straight GOP and Trump paraphernalia sprung up all over.
That rural area, which is in the same congressional district as my suburban home, is about 15 miles from a metro area of about 1.2 million people. Within 45 minutes you could drive from there to research facilities / offices of IBM, Microsoft, Apple, Google, a bunch of biotech companies, three R1 universities, one of the best community college systems in the country, and so on. And yet the political ads from the GOP would have you believe that Democrats are destroying our way of life because, I dunno, trans people exist or something.
There is a booming economy attracting highly educated people from all over the country that is overseen by Republicans whose only electoral concern—in their gerrymandered districts—is fending off a primary from their right. The rural population is fed a constant diet of hatred and fear of scary liberals flooding in from out of state while said Republicans shovel money to them from the prosperous cities and suburbs. We (baby-eating liberals) are fine with this arrangement; we even have special words like 'localvore' to express how much we like buying food from prosperous, local farmers. (Side note, we learned of this farm when my wife made some peach jam for their patriarch out of his peaches after they bonded over the deliciousness of the 'ugly peaches'.) But, wow, the bumper stickers with Trump flipping off the libs, the confederate flags, AM hate-radio, the vicious political ads. It's a parallel universe where seizing opportunity is akin to treason.
I have no point. It's just a stark demonstration of political self-interest holding people back, encouraging tribalism and exploiting nostalgia and xenophobia to retain power.
As long as you are going to eat the babies anyway, would you mind mailing me their adrenochrome? It sells for a small fortune in these big Liberal cities!
At the end of the day, the tide of urbanization is just not going to turn around short of a large nuclear exchange.
The GOP is exploiting the (understandable) dislocation, anomie, and fear that population declines provoke in rural communities and has been ever since the demographic trends became clear. It's not even economics, really. Wages are ok, decent housing plentiful, some opportunities exist. It's that there are no more kids and all the young families leave for greener pastures within, as you note, an hour of the major metros. Some of them then resent "having" to leave, many of those who do resent how different their kids' outlooks are from their own, and everyone left at home resents these things even more.
And, of course, the hipster/tribal kicks wing of the Democrats is helping push every step of the way. They're just hicks who don't know what's best for them, right?
I'm not at all sure what could happen in the future to break the deadlock between these competing forms of stupidity. I can absolutely see the GOP, over the 21st century, evolving to be genuinely populist, in which case it can assemble smashing majorities. It's less likely but still possible that the Democrats break the back of the tribalistic assholes who currently call themselves the left and manage to claw back a large chunk of working-class and rural voters, in which case they'll be able to hold and exercise power.
But... all of that might be short-circuited if the GOP decides to try to shoot the Republic in the back of the head next time it loses. 20 years in power will see them slowly bleed everyone except their hardcore base, and then they'll have to choose between holding the other 55-60% of the population at gunpoint and becoming Belarus or Russia, vs. ceding power and clawing back from a long period in the wilderness as the Democrats gradually overstep.
Very skeptical that any significant number of men on disability don’t require it (especially in the absence of excellent medical/psychological care, appropriate work accommodations and social support). How did you come to this view?
Like, you can't seriously argue that we legitimately have more than twice as many people physically unable to do work now compared to when the ADA was passed.
I mean, I could. Maybe fewer disabled men have been wrongly rejected over time? Adjusting for population would also be a consideration. I think you’d need some kind of independent audit to really make the case. I’d be surprised if cases aren’t audited…
A lot of those 47% do pay payroll tax, and in calculating Americans’ tax burdens it is unfair and dishonest not to add payroll tax and income tax together.
“Broad based” doesn’t have to mean 100% of the population. Other things equal, the same amount of money being given to/taken from lower income people will have more macroeconomic effect than being given to/taken from higher income people. But if we also care about individual well-being as well as macroeconomic effect, then other things aren’t fully equal. Giving to/taking from lower income people has a bigger well-being effect than giving to/taking from higher income people. So when you are giving to people both factors push towards distributing more to the low income side of the scale. But when you are taking from people, one factor pushes downwards and the other factor pushes upwards, so you probably want to be targeting somewhere in the broad middle.
It seems a just a bit blithe to be calling for "draining the wallets" or talking about "people whose money we need to be taking away"! It sure would be nice to hear a philosophy major explain the moral philosophy of when precisely it is justified to make those impositions on peoples' wallets and whether the current moment really clears that hurdle.
Even if the politics were currently favorable to raising taxes, how many Democrats would be content with just that and not propose a ton of new spending? My experience of the 2020 primary tells me not many.
Inflation is also the solution to the problem. There is no need to “cut” anything, you just need to slow the rate of increase. If we increase defense spending 4% that’s actually a 4% cut. It makes a lot of political decisions much easier.
The rationale for why I have the entire non-tax sheltered portion of my savings in real estate is two-fold: either we make good policy, in which case demand for urban and suburban living rises due to steady population and living standards growth, which will drive steady growth in prices even with YIMBT policies…
Or we fuck up everything and the combination of NIMBY insanity and inflating our way out of vast accumulated debts holds real prices steady while fixed interest debts decline significantly in value.
In the best case scenario, a portfolio of rental real estate performs within shouting distance of equities, where my retirement savings is anyway. In the worst case, rental real estate is the only thing that performs even passably well over the coming half-century, even if still not great.
I have a good-sized chunk of emergency cash and a large retirement investment portfolio (I nearly max a 401(k), my wife maxes an IRA, and I max an HSA that we do not draw on ever) across domestic and global stock indices, and will transition that towards bonds and fixed income as I age. We also have a well-funded 529 for our child, which should suffice to cover between 50% and 100% of tuition if/when she pursues higher education.
But I’m decidedly pessimistic about the returns I will see in my retirement accounts over the coming half-century; real estate *is* my diversification.
About the only thing I do not own at present is crypto, and I’d sooner shoot myself.
Obviously no one is going to do any of those things for obvious political reasons. As well as the maybe less obvious reason that the economic zeitgeist takes a while to turn around as the whole Hamilton project group in the Obama administration shows.
Interestingly, I think Manchin is one of the few who has made transition. Biden has rhetorically started to pivot a bit and Republicans talk vaguely about spending, but no one's seems close to any sort of position to cut a deal.
But, by the time they might be it will probably be too late...
I've often wondered how many people really mean "deficit" when they say inflation, or vice versa. A lot of those former deficit hawk voices are the same ones making the most noise now about e.g. student loan forgiveness being inflationary. I guess the ideological directionality is the same in both cases, and yet...(meanwhile, progressives denying it'll impact the economy and will in fact spur further growth has a different kind of nostalgic scent).
The thing about ephemeral discretionary spending above income...I mean...what else is there to do with the money? The stimulus was a decent chunk of cash, but not "now I can afford my first down payment on a house" transformative level cash. And so many things weren't available for purchase at all*, for months/years. Saving for retirement is surely good, but with all the major world-shaking of the last few years, I can't blame people for being suspicious that they'll get to have a happy peaceful retirement at 65 or whatever. The peace of mind that comes from having a sound investment portfolio also just isn't the same kind of high one gets from, like, a PlayStation 5. Copes for stress matter a lot more when acute stress is high. (For that matter, the knowledge that rising inflation means holding onto money is extra bad - I think that also drives people to spend rather than save. Because they don't know about/don't have access to higher-yield savings/investment vehicles, which would blunt or negate the loss. If the only option is keeping it in a checking account or mattress, then, yeah - it makes a certain kind of sense to spend now, before that money is worth even less a month from now.)
And I think many people are also "spending down" a different type of savings, the pent-up social energy that Good Conscientious Liberals (stereotyping, sorry) kept safely at home during the worst of covid. That often does come with discretionary spending that people don't really "need"...it just feels extra nice to see friends again, and that turns into a great excuse for bacchanalia-levels of food and drink spending. There's surely also some factor of "gotta support impacted industries" which will take some time to sort out of the national psyche. Like, at this point I've sorta internalized that delivery food should "naturally" cost X amount more, and tips should be Y percent higher, even as the covid pressures on restaurants taper off. If menu prices suddenly dropped overnight to their 2019 levels, it'd probably take me awhile to adjust behaviour. That's part of the inflation-pops-up-elsewhere whack-a-mole: total spending might be the same, but if it's allocated really differently, that makes certain baskets of goods cheap at the cost of others being expensive. (And, yes, there's still a sizeable cohort of vaxxed-and-not-relaxed who I'm sure continue to spend differently vs 2019.)
*at remotely pre-covid prices, anyway. It's not like there physically weren't any more dumbbells, Nintendo Switch consoles, etc.
" The stimulus was a decent chunk of cash, but not "now I can afford my first down payment on a house" transformative level cash. "
Among the weirder parts of Matt's soak-the-UMC analysis above is that the (direct, rather than PPP) stimulus payments were means-tested. So the people with the extra money to throw around who are doing the direct spending in question (for the reasons you mention) are, at least in the first instance, not the people whose demand Matt is proposing to curb.
I thought there were three separate rounds of stimulus checks, but only the last round was means tested. Or maybe my income falls between the thresholds that they used?
I was pricing air b and bs for next summer in Scotland and Nova Scotia and the prices are already falling. The pent up demand for travel is almost exhausted
I agree completely with the analysis. But there is exactly zero chance that any of this will happen, right?
Let us remember that it was very recently that Biden decided to do student loan forgiveness, which is the worst possible policy in current economic conditions (increases deficit, increases spending, bad distributional effects, no long term structural benefit).
He seems incapable of doing anything even remotely unpopular, and what Matt proposes would be *very* unpopular.
I’d say the chances of a return to deficit hawkery now are greater than the chances in 2010 that congress would decide to take advantage of negative real interest rates to lock in a bunch of debt to pay for a major infrastructure package.
>He seems incapable of doing anything even remotely unpopular, and what Matt proposes would be *very* unpopular.
To be fair, Matt has also been beating the Popularisim drum for well over a year now. Enacting unpopular tax policies probably seems like political malpractice if Biden & Co. are seriously subscribing to this theory of power.
The student loan forgiveness plan he actually went ahead with was about even I think. Not exactly popular but definitely not unpopular.
Popular among a Democratic core constituency.
Agreed. Populist economics is the name of the game on both sides of the isle. No one is going to risk losing to do something responsible that would benefit the economy.
That's because us Americans subsidize them through higher drug costs. The pharma execs admitted that unsavory fact in Congressional hearings.
Interesting
I read the abstract and a bit at the top and it seems to be saying that research costs on drug X don't correlate with cost for drug X.
But that doesn't necessarily mean they don't need the higher costs to recoup R&D.
1) Plenty of drugs don't pan out in trials. So those R&D costs have to be recouped somewhat. There's no particular reason why the drugs that have higher R&D costs have to be the ones that recoup this loss.
2) You'd certainly expect that more lucrative potential areas would be the focus of higher R&D costs, but sometimes you get things like Viagra, where the medication isn't used for what it was initially developed for.
===
That said, I'd expect _some_ correlation - it makes sense to be willing to invest more R&D in an area where you expect to be able to charge more. That is, if you don't expect a drug to be able to sell for $1,000 a dose, then you won't invest R&D in it if it will only be profitable at $1,000 a dose.
You can't credibly do that because of our politics.
Can the Dems bind the GOP to follow through? Or vice versa?
Sure, they will do the politically-beneficial stuff, but they will never do the detrimental/costly stuff.
Conceivably Congress could write legislation that had some contract-like characteristics, no? Even something as simple as "after X years, Y provision becomes effective" (which is already a common feature of a lot of legislation). Admittedly there would be issues with preventing future parties from rescinding them, but it seems like it's a start.
Future parties rescind legislation all the time, or at least attempt to.
While I agree that now would actually be an appropriate time for austerity policies, I don’t think the politics will work out. Any policy that seeks to decrease the consumption of a significant enough portion of the electorate to affect inflation is going to be politically toxic. Just look at how we can’t even contemplate increasing taxes on anyone earning less than $400k/year.
I don’t think it matters what combination of tax increases and benefit decreases compose such an austerity policy. The simple fact that a non-trivial number of voters will see a proposal to decrease their spending power will lead to massive political blowback. I just don’t see how any politician could propose or support such a proposal without consigning themselves to future electoral defeat.
Although I do see some potential if there is some sort of external force constraining our options. For example, the new UK government has been forced into a U-turn when their hastily developed tax cuts and financial support for household energy bills led to turmoil in their government bond market as well as a rapid depreciation of their currency.
I guess something similar could happen in the US. My understanding is that a lot of the 90s concern about deficit was focused on “bond vigilantes” causing financial turmoil if investors lost faith in US government debt. E.g., Carville’s famous quote about wanting to be reincarnated as the bond market because, “You can intimidate everybody”.
Britain has much less room for maneuver because 1) the pound isn’t a full blown reserve currency and 2) it imports enough stuff that any big fall in the pound is inflationary. The U.S. has the huge advantage of being able to conjure a reserve currency out of thin air- an advantage unlikely to wither when Europe is at war and far less stable than the US. The U.S. is also less dependent on trade, so a falling dollar is less inflationary than a falling pound.
The reason that the US dollar is rising against other currencies has little to do with it being a reserve currency and everything to do with the fed having raised rates far more than others. E.g. Fed funds rate is over 3.25% while the BOE is 2.25 and the ECB rate is 1.25%
The Euro could be a coequal reserve currency if (and only if) Putin is contained. As long as European governments print money to outbid each other for natural gas, the Euro will be the new lira.
The decline in the stock market has already wiped out $10 trillion of market cap, more than the $7 or $8 trillion the federal government injected into the economy during the pandemic. Yet inflation persists. Putting money into the hands of poor people is more inflationary than putting money into the hands of rentiers. Pandemic benefits were spread much more evenly than stock market wealth, ergo they created buying power in a way a fat stock market simply doesn’t. A good stock market pushes up prices of high end real estate and room rates at fancy hotels. Pandemic benefits pushed up prices of cars, TVs and normal widgets. An aside— pasta prices have increased over 50%, but that’s because Ukraine and Russia are both grain exporters and grain commodity prices have almost doubled. Next year may bring a historically profitable harvest in Saskatchewan.
Yes, I was thinking the same thing. The inconvenient truth is that more money in the hands of rich people doesn't contribute much to inflation - at least inflation in things that ordinary people consume. It, instead goes to higher prices for stuff like luxury estates, private jets, and financial assets, from stocks to bitcoin.
If you really want to use taxation to fight inflation, you have to target the tax at ordinary people and lower-income people, precisely where it would cause the most pain, both real and political (and also why taxation to fight inflation might not be such a good idea in the first place).
And the people who make those goods don't spend it on anything? Inflation cannot stay constrained to just a few sectors.
Except, it very clearly did.
Overall there was a huge run up in prices of "luxury" and investment items in the last decade plus....art, collector cars, real estate, physical and financial investments, crypto, etc. just as Eric states. Those gains mostly circulated among the wealthy, who doubled down again in ever more varied investments--this is/was often referred to as the "Everything Boom".
During this nearly unprecedented decade-plus bull market, inflation was near-nothing... but try pricing a classic Porsche in 2019.
One is paper money in trusts and funds, the other is direct cash to folks with high propensity to consume.
correct
Actions: $1,000B Infrastructure Bill. A $1,900B ARB. The $740B "Inflation Reduction Act." A $500B giveaway by "forgiving" student loans. Over $4T.
Results: real wages are down 6% since Jan. 2021; the S&P500 is down (18%) YTD nominally; Inflation is at a 40-year high. The Strategic Petroleum Reserve is at its lowest point since 1984.
Matt's proposal is to "drain the wallets of those who can most afford it". Based on results to date, the President and Congress are draining our wallets as fast as they can.
Inflation doesn’t drain the wallets in the relevant sense. Inflation is an increase in the nominal dollars sloshing around.
Unless your salary is keeping up with the higher costs from inflation, you are quite definitely poorer.
The cause of inflation is more dollars "sloshing around", yes. But unless they are sloshing into your pocket it is definitely a drain on personal finances.
That’s not the relevant sense of draining that matters here.
I think it is. There is a clear wealth effect to spending rates, and if your net worth is cut by 20%+, you will most definitely spend less. The government doesn't get the money, though.
Inflation is a tax on cash.
Not in the sense that matters for the current discussion. It doesn't actually remove cash from circulation in the way that stops inflation, the way an actual tax does.
Beyond Binya's admittedly relatively minor point below, I think it also worth mentioning that the previous administration also tossed a similar sum of money into the economy under similar circumstances.
Between the two we've overshot, yes, and I agree that Biden is slow to pivot to face that reality due to pressure from the "We disbelieve in economics" left flank of the party.
But... I think we also likely agree that the effects of this overshoot are less harmful than those stemming from the lost decade which followed our undershoot in 2008-09? I'd rather face today's circumstances than what we dealt with between 2009 and 2014 or even 2018.
We need, and MY has often advocated for, structurally-embedded, systemic, *consistent* ways of ratcheting fiscal stimuli up and down, rather than the error-prone, ad hoc, scattershot methods of today.
That said, from a purely policy angle I don't really find GOP control over the House and a resulting period of deadlock all that harmful. The IRA makes most of the necessary investments to get the US on a path to decarbonizing not just the electrical grid but also many forms of heavy industry, the Democrats have taken China's threats seriously in a way the GOP refuses to despite their rhetoric, the infrastructure funding will allow us to get ahead of the deferred maintenance backlog for the most part... there's not a great deal to be done in the next year or two which cannot be done in Secret Congress or isn't a matter of foreign affairs. And I don't *think* the GOP is going to give in to its MAGA-dumbasses and pull support for Ukraine, though I might be wrong.
My only real concern is the very possible danger that they will win power in the 2022 and 2024 elections and then succeed in saying "No backsies" to the electorate.
Eventually that will blow up in all our faces, not just because of the moral issues surrounding an authoritarian herrenvolk democracy, but because short-circuiting the normal thermostatic nature of American politics will inevitably end in violence. They'll become accustomed to being the rightful party of government, and there's no way that, in 2036, or '40, they'll give up power. Not even if they lose in a landslide so big that it overwhelms even their gerrymandering and structural advantages in the Senate.
And then *everything* comes apart, because the second 50+ percent of the populace realizes its voice is never going to count again, there's nothing holding the center together.
Unfortunately, the Democrats don't really have the ability to restrain their loud-mouth tribalists, so they can't assemble a broad coalition to consign the current iteration of the GOP to the wilderness long enough for the nutjobs to burn out and their numbers to dwindle as they did in the two decades after 1932.
I'm not sure *anyone* has that power anymore, in the age of social media amplification and global communications.
Regarding your first three paragraphs: The previous administration tossed money into the economy, but not nearly so much and, importantly, the circumstances were not similar at all. Once the vaccines became available in late 2020, combined with the unwillingness of the populace to keep major parts of the economy shuttered, the circumstances changed dramatically. But the Administration wanted to spend now that they had a trifecta in the House, Senate and Presidency. So spend they did.
Even with the gaslighting about "transitory", we could all see inflation was coming. The Fed had to see it, even if they chose not to do much about it. Even with the evidence, Biden still chose to initiate a $500B giveaway to student loan borrowers.
Address the risks around 2024 if and when it appears they might come to fruition. I still hope (and expect, frankly) that Trump won't run again. In the meantime, there is the election happening in 3 weeks that only affects Congress.
Eh, hard, hard disagree on the first paragraph. The GOP has, every chance it gets, handled discretionary spending like a drunken sailor to a far greater extent than the Democrats have, since long before I was born. Goldwater was the last GOP candidate to have any sort of commitment to basic fiscal probity. Nixon then leaned on the Fed to avoid rate hikes and set us up for the latter half of the 70's in the same way that Trump helped set us up for today. Since 1968 the Democrats have been the only real choice for *occasional* fiscal sustainability, even if they do it the wrong way around from your perspective.
As for the second, agreed, and I have structured my investment strategy around this. Not just because of the momentary circumstances of 2021, but because unless we actually start paying our way there'll be much more where that came from. Too much more.
In the 50 years after WWII we lowered our debt to GDP ratio by close to 100 points; a third, roughly, was paid off, a third was grown out of, and a third was inflated away. Absent much more rapid immigration or technological development, we'll not be growing our way out of our existing structural deficits, so the only ways that this game ends are to either vastly increase taxes without a commensurate increase in services, or allow a prolonged period of high inflation.*
The former is absolutely a political impossibility. It will not happen. No chance in hell. Which leaves the latter. And while that might take 30 years to play out, it will indeed play to the end.
That, as I said elsewhere, means that rental real estate purchased with fixed interest rate debts is basically the only game in town. If I'm wrong it performs no or little worse than equities, if I'm right it's the only possible investment with any sort of return over the next 40 years.
As for the third paragraph... absent a sea change in the current climate the GOP *will* win fair and square in 2024 whether with Trump or someone else, and by 2028 a nice recovery will be ticking along to keep them in power. As long as they're winning fair and square there won't be too much to be said on the topic.
We'll just have to wait and see what things look like in 2032, when they'll have to face the very real prospect of losing.
Will the party tolerate it? Given what we see today, I say no way in hell. They'll tweak the rules in places like Wisconsin or Pennsylvania to make sure that gerrymandered state legislatures have the final say on Electoral Vote allocation, or at least implement the Maine Rule if polling looks bad, use state officials to toss ballots in close races, and cling to power by any means necessary. And the Supreme Court will rubber-stamp it top to bottom, provided even the slimmest of real legal justifications that Trump's "crack team" was too stupid to proffer in 2020-21. How will the voters respond to that? *Maybe* with enough virulence to give the Democrats a bulletproof trifecta to enact electoral reforms in 2036, but I doubt it. Not unless the GOP fucks something up very badly in the interim.
No, my bet, if the GOP walks down this road, is that they'll have to fail as badly as the Tories are in Britain to push the electorate into a 55%+ landslide sometime in the 2040's, and then they'll try to steal even that election.
There are no actual conservatives over there anymore, or the meaning of the word has changed beyond all recognition, you know this as well as I do. The GOP going forward is going to be nothing but all the worst Longist tendencies of the Southern New Deal Democrats, with none of their restraining or moderate virtues.
*There's always the choice of an outright default, but presented with that option the Federal Reserve will absolutely allow inflation to run at a breakneck pace for a long time. The worst-case scenario, 10%+ inflation for a decade, is a tenth as bad as a sovereign default would be.
Your level of confidence predicting what will happen in 2032 or 2036 is really quite impressive.
Ehh, maybe the world ends before then, or the GOP mismanages a financial crisis so badly that it's consigned to the sidelines like under Hoover, but if things tick along in more or less the manner they have since 1980, which I think is a fair bet for the half-century from 2020 onward, then there's nothing to knock anyone off this course.
2024 and '28 seem near certainties at this point. There is virtually no chance of getting the coming recession over with before November, 2024, and that all but ensures it will be over and done with by November, 2028.
Which leaves us to guess at the shape of 2032 and '36, and there doesn't seem to be much of anything to shift either party off-center from where they are today.
The Democrats will perhaps be mildly more moderate than they were in 2020, but the left/woke/tribal grouping is too large to effectively sideline, and it will continue to prevent them from assembling a long-term natural governing coalition. The GOP's incipient populism is still a sham and will be well past that point, which means they won't be able to do so either.
Thermostatic politics dictates the GOP will lose one of those two years, but its structural advantages mean the loss will be narrow as in 2020. The temptation to resort to changing the rules or tossing electoral votes to squeak by for another term will be nearly irresistible, certainly when they've now convinced 70% of their base that they'll be saving democracy instead of killing it.
Might things be completely and utterly different in every way? Sure. But this is the scenario about which I'm worried, even if it's only a 20-30% chance.
I think your fears make a lot of sense, with the important caveat that it is *really* hard to see where things will go in 10 or 20 years. Also, while the Court is quite right-wing, GOP-appointed judges have thus far mostly been disinclined to do the party's bidding when it comes to electoral shenannigans. So I'm not sure they'd be a rubber stamp.
That said, I wouldn't write off the Democrats in 2024. One of the reasons why I'm not all that bothered by the Republicans taking the House this year is that I think it could push Biden toward the center, which will improve his odds of re-election. Also:
-I think head-to-head polls mostly show Biden beating Trump right now. Yes, it's two years out, and the margins generally are not high enough to forestall Trump prevailing in the Electoral College. But it does show the Dems have a real chance.
-Look at the midterms. We've got high inflation, a recession looming, and a Democratic president with a ~40% approval rating and...it's an open question as to whether the GOP will take Congress, even though the Dems have razor-thin majorities. And the thermostatic tendencies of politics favor the party out of power. This should be a wave election! Even if the polls are underestimating GOP support and they take the House and Senate, it's not gonna be that. They're not gonna gain massive numbers of seats.
I honestly think a lot of people look at the Trump Show and, even if they don't particularly like the Democrats, think "oh God, not *that* again." Now, if the GOP is smart enough to nominate someone other than Trump, it's hard to see them losing in 2024 as things currently stand. But, as the cliche goes, two years is a long time in politics.
Get your facts right. The $740b in the IRA was the revenues increases. The spending was about $510b. It was a significantly deficit reducing measure.
Mistakes were definitely made with the earlier measures. But considering what a disaster the lack of stimulus after 2008 caused, and the curveball Putin threw the global economy, I'm not sure it's such a bad outcome. The S&P 500 is pretty much where it was prior to COVID, adjusted for inflation.
https://en.wikipedia.org/wiki/Inflation_Reduction_Act_of_2022
My sincere apologies. You are right. The correct number is closer to $3.5T in total.
I double-checked my other items to make sure I didn't make a similar mistake. The falling real wages, lower stock market, inflation at 40 -year high and SPR numbers are correct.
I didn't mean to nitpick. I get that $200b in the context of $3.5-4b is not that much. I guess my point is, Biden is trying. He made an honest mistake over-stimulating in 2021, borne of the trauma of 2008. Infrastructure had a lot of R votes, infrastructure is almost as bad as defence for causing congressional largesse
My perception of student loans is Biden's role making it smaller. He certainly got enough heat from his left for "only" doing $500b. Vicious attacks made against him (racism etc) over it.
If "Biden is trying" results in bad economic results, why not expect him to course-correct? The student loan forgiveness might be less than his left flank wants, but he isn't obligated to do ANY of it at all. It is a Presidential Order, and he can just decide not to do it.
That he isn't making any course correction tells me that the results we've seen are what we should expect if he and the Congress stay the same. Maybe that is just my little version of thermostatic politics in action.
IRA was a course correction! $200b deficit reduction!
I think if you look at history since the Reagan Revolution, the deficit goes down most with a Democratic President / Republican Congress, and goes up the most with unified Republican control. We're probably about to move into a Democratic President / Republican Congress, I wouldn't be surprised if the deficit does come down a little, which I regard as a good thing provided it's done in an intelligent way (optimistic perhaps).
What "mistakes" that were definitely made would you suggest correcting?
Hindsight is 20/20, and in hindsight it's obvious there was too much stimulus.
However the structure of the stimulus bill was criticised in advance (including by Matt) for not being designed as an automatic stabiliser, instead of the lump sum design it used. Had it been done that way, then as the data came in better than expected, its size would have automatically decreased from the $1.9t.
I don't know enough about the others to comment if they could have been structured better
I actually think why there isn't interest in deficit hawkery is quite simple - the mental model that would say that deficits should grow in 2010 and but be cut in 2022 is a keynesian demand management one. But most people find the idea that the deficit should be used be used to put a floor or ceiling to economic growth weird and scary. So we always get pro-cyclical fiscal policy - as economies enter recessions and government spending on welfare increases people demand cuts, as economies get hot and expenditure on welfare falls people become complacent about the deficit. This is the big objection to keynesianism - that it fundamentally becomes an excuse to spends lots of money during recessions which will never be repaid
This is exactly right. The fact that the self described Keynesians are very loud during recessions and quiet during boom times perfectly illustrates it.
House Republicans have said that they won’t vote to increase the debt ceiling if they have a congressional majority unless there are serious cuts made to a variety of entitlements. There’s your deficit hawks.
Are those people actually deficit hawks? Don't they also want to cut taxes? I submit they will cut taxes and increase the deficit over and above any entitlement cuts they manage to pass.
The optimal strategy is not to negotiate with terrorists. That was Obama's conclusion after Republicans last pulled this stunt 2011 and I think he's right. Politics is a repeated game, if you let Republicans extract massively unpopular concessions by threatening to blow up the US economy, they will keep doing it. Especially over something as dumb as the debt ceiling. All it does is pay for spending Congress already approved.
I'm hopeful Democrats have wised up sufficiently to either finally cancel the debt ceiling (unlikely) or at least it raise past the 2024 election, during the lame duck period after the mid-terms.
I need a trigger warning before someone mentions Gottheimer. He seems to be just an incredible tool
The optimal strategy is to just abolish the debt ceiling in the lame duck session before Republicans get the chance to extort concessions to raise it.
Anytime you have these must-pass bills to avoid catastrophic consequences, it turns into a predictable game of chicken, and whichever side can credibly seem crazy enough to actually allow a debt default gets to extort policy concessions from the other side. The whole process is dumb and entirely preventable.
Given that rich people have a lower propensity to consume, is there any reason beyond fairness/equity/etc. to raise their taxes specifically?
Matt seems more jazzed on raising taxes on the upper middle class than the rich. We consume a large majority of our incomes, so cutting them would cause disinflation.
I'm not opposed to raising taxes on the upper middle class (who I guess I was referring to as "rich" in my comment). I'm just saying that UMC people consume a smaller portion of our incomes than lower income people, so if we're primarily concerned with inflation then a tax hike across the board will be more appropriate than a tax hike targeted at people who it won't affect too much -- because it affecting people is the point.
You're right, Matt specifically says to drain the wallets of those who can best afford it. So it's clearly a fairness consideration, if you want to affect aggregate demand, which is what we're talking about here, lower and middle income people are more sensitive to changes in their spending habits.
And Matt knows that, but it's not his preference. But I think the economic impact is less differentiated than Matt does between a fiscal solution and a monetary one. The baseline is you need less aggregate spending, if UMC people cut spending enough or interest rates pummel interest sensitive sectors the goal is to cut spending enough to induce "slack" in the economy.
When facts battle ideology, always bet on ideology winning.
This seems more like a question of values to me. Raising taxes on the bottom half of the income distribution might have a bigger impact on inflation but would also entail a bigger hit to living standards for those people. Like, you could wind up with situations where people can't afford basic necessities. You can disagree, but I don't know...I think that's bad.
Whereas raising taxes on the upper middle class probably means fewer vacations, less dining out, you keep the old car running longer, that sort of thing. That might have a somewhat smaller impact on inflation, but it would still have an impact (a lot of spending goes towards that stuff!) and it seems more humane to me.
Again, you can disagree, but it's not about facts vs. ideology, it's about balancing different goals and values against each other.
UMC people have a marginal propensity to consume if at least 85%, possibly higher. The effect on aggregate demand of depriving a UMC household of a dollar isn’t so different from doing the same thing to a warehouse worker. It is the truly rich who have a low marginal propensity to consume, like under 50%, sometimes under 10%
For someone with an income of $200-400k per year, 85% of disposable income being consumed seems incredibly high. Especially given that many of these people are getting sweet deals on housing, having locked in long-term cheap mortgage rates during the market bottom a year ago.
People may have gotten sweet deals on mortgage rates, but interest rates and prices are over the long run inversely correlated. Which is to say, the "cheap mortgages" they got were for very expensive homes.
Maybe your sense of time is weird, but a year ago the market was not bottomed, it was in the middle of a huge bull run that ended in late December/January. In other words, it was more like a market top.
If you are referring to the real estate market... you clearly were not trying to buy a house a year ago. In hot markets people were offering 20-40% over asking prices, waiving inspections, paying all cash, etc. It felt like you could not buy a shack with no electricity, much less a house.
Source? Google is proving unhelpful.
I think the UMC is in a sweet spot where we still consume most of our income, and there’s a lot of us (unlike the really rich) but we don’t suffer too much from decreasing consumption and have enough money that you can get as much from 10% of the population as you could from the lower 50%.
I once had it put to me by a *very* sharp acquaintance that the UMC were arguably the optimal consumer to have in mind when it came to crafting a lot of policy by dint of the fact that they were rich enough not to have consumption patterns that were dominated by high time-preference, but not rich enough that consumption was completely abstracted from income (and to a lesser extent wealth) in the way it was for the ultrawealthy.
Also the optimal people to target for donor asks as a political candidate. You have to be rich enough to feel like giving out a few hundred dollars to a lost cause like Jaime Harrison or Amy McGrath, but numerous enough that those hundred here and hundred there add up to real money. The fact that individual donations are capped at $2,900 means there’s really no need to target multimillionaires.
UMC people have more money. I suspect this is targeted at where the money is, and UMC and above have all the money.
While I think MMT is a broadly idiotic idea (Noah Smith had some good posts about why), what they get right is that the focus should be on real resources rather than money. That means stimulus when inflation is low and austerity when it is high. Right now, that means that taxes and interest rates have to go up to cut spending power.
In a UK perspective, the recent regressive tax cuts (now rescinded) were one of the most idiotic plans that could ever have been made. Much as in the US, about 10 years ago an aggressive economic stimulus plan was both achievable and sound but it wasn't undertaken. A real opportunity was pissed away.
the funniest thing about MMT is that literally zero of its proponents are suggesting austerity measures right now
Agreed: the concept of MMT has always struck me as correct in a very banal, factual manner, but the people who identify under the banner of MMT never follow through with a major half of the concept.
These Noah Smith posts are good:
https://noahpinion.substack.com/p/examining-an-mmt-model-in-detail
https://noahpinion.substack.com/p/the-nyt-article-on-mmt-is-really
MMT seems to be a moving feast that can never be falsified. It was probably stupid of me to bring it up in the first place.
I thought this was the Keynesian idea, but the MMT people only believe in spending during slowdowns and don’t care about austerity during booms.
The ice cream party is over, but no one in Washington has gone home.
I think in the 2000-2015 period, the people in charge had come of age in the 1980s, when inflation was the big problem. But now many of the people in charge came of age during the period when deficit hawks were constantly increasing unemployment.
People’s intuitions are developed at one point in the cycle, but since the cycle is several decades long, they often then use those intuitions at the other point in the cycle before they really internalize that these intuitions aren’t always right.
I remember reading how a lot of policymakers in the 70s grew up in the 30s and really didn't want to raise unemployment. People always fight the last battle.
I think there's probably something to this, but given the average age of Congress, I'm not sure there's a real distinction to be drawn between the people in charge in 2000-15 and those in charge today, at least at the legislative level.
It looks like the average age of congress was about 50 in 1989 and 60 in 2017. That still means that the average birth date moved 20 years forward over 30 years. So I'm guessing that in 2020, the average birth date is something like 12-13 years later than it was in 2000.
https://www.motherjones.com/kevin-drum/2018/04/the-mystery-of-the-great-congressional-youth-revolution/
In any case, although Alan Simpson and Erskine Bowles are apparently both still alive, they're both long-retired, and there are current cabinet secretaries who were in elementary school while they were Senate Minority Leader and White House Chief of Staff respectively.
We need broad based tax increases. Matt’s suggestion doesn’t work, and it’s illustrated by how we talk about stimulus. When stimulus is limited to lower incomes, the logic given is that the rich don’t spend all their money anyway and would just save it, while lower classes spend more immediately. Higher multiplier. But in this case, we want the reverse, so raising taxes on just those making $700k a year will do nothing to slow aggregate demand.
As Mitt said, 47% of Americans don’t pay any federal income tax. It’s a hard political decision, but a broad based tax increase would be fair and help reduce inflation. We don’t need to balance the budget completely, but setting the US up on a sustainable path now will give us flexibility in the future.
Hopefully Biden can cut a grand deal after the election.
Also cutting disability payments will get people (mostly listless men) back into the labor force, helping the supply side as well.
rather than cutting disability payments, hire more administrative judges to do a better job of deciding who gets them. the standard for federal disability, unable to perform any job that exists in substantial numbers in the American economy, is actually quite harsh
I read a big story a few years back about how Republican-run states were pushing people onto disability to get them out of basically any state-run welfare / unemployment / etc. That way they could 'end entitlements', refuse Medicaid expansion and cut taxes while trumpeting low unemployment (because disability recipients aren't counted as unemployed), but in reality they were just transferring the burden to states that are net federal tax payers. The reporter found some small towns where some staggering percentage of working-age men (like over half) were on permanent disability for 'back pain' or some other vague injury.
The take home message was that, because these programs are administered at the state level, it has turned into a hostage situation where state governments more or less threaten to take away benefits from the poorest and truly disabled if the feds ever try to to cut or adjust disability benefits. The irony was that many of the recipients preferred to work for a living, but that the job market in their towns was so bad that it was either that or be unemployed with no (or meager) benefits because the state programs had been gutted. So you had Republican politicians talking out of both sides of their mouth, slamming entitlements at the federal level while blocking entitlement reform to benefit Republicans at the state level.
I'm not saying that Democrats don't play similar games, just that glaringly obvious sources of waste often turn out to be politically impossible to eliminate for the dumbest possible reasons.
There's no way this will change. If it did it would send rural populations spiraling even faster than they did 2010-20, as people simply *must* leave to find work, or literally starve.
The GOP has *no* interest in genuine reforms here, because it would be electorally devastating to a majority that's likely to be held by blatant gerrymanders in states like MO, OH, TN, and TX which rapid urban growth would break.
Which brings me to the hottest of hot takes: let the GOP burn Social Security to the ground both for the short-to-medium-term backlash and because it will do much the same to their gerrymanders.
If we really wanted to play partisan over patriot, we could simply let them do what they want for a decade or two. That'd be enough to discredit them for a good, long while.
Downshot is, we'd likely need to fight a (hopefully small) civil war to boot them out even after a massive electoral landslide.
A bit of a tangent, but over the weekend we drove 20 minutes to visit a farm that has a pumpkin patch and other stuff for kids (it was a lot of fun). If you had passed out and woken up there, you'd think it was the middle of nowhere—there wasn't even cell phone coverage to speak of. On the drive over, the lawn signs turned straight GOP and Trump paraphernalia sprung up all over.
That rural area, which is in the same congressional district as my suburban home, is about 15 miles from a metro area of about 1.2 million people. Within 45 minutes you could drive from there to research facilities / offices of IBM, Microsoft, Apple, Google, a bunch of biotech companies, three R1 universities, one of the best community college systems in the country, and so on. And yet the political ads from the GOP would have you believe that Democrats are destroying our way of life because, I dunno, trans people exist or something.
There is a booming economy attracting highly educated people from all over the country that is overseen by Republicans whose only electoral concern—in their gerrymandered districts—is fending off a primary from their right. The rural population is fed a constant diet of hatred and fear of scary liberals flooding in from out of state while said Republicans shovel money to them from the prosperous cities and suburbs. We (baby-eating liberals) are fine with this arrangement; we even have special words like 'localvore' to express how much we like buying food from prosperous, local farmers. (Side note, we learned of this farm when my wife made some peach jam for their patriarch out of his peaches after they bonded over the deliciousness of the 'ugly peaches'.) But, wow, the bumper stickers with Trump flipping off the libs, the confederate flags, AM hate-radio, the vicious political ads. It's a parallel universe where seizing opportunity is akin to treason.
I have no point. It's just a stark demonstration of political self-interest holding people back, encouraging tribalism and exploiting nostalgia and xenophobia to retain power.
As long as you are going to eat the babies anyway, would you mind mailing me their adrenochrome? It sells for a small fortune in these big Liberal cities!
At the end of the day, the tide of urbanization is just not going to turn around short of a large nuclear exchange.
The GOP is exploiting the (understandable) dislocation, anomie, and fear that population declines provoke in rural communities and has been ever since the demographic trends became clear. It's not even economics, really. Wages are ok, decent housing plentiful, some opportunities exist. It's that there are no more kids and all the young families leave for greener pastures within, as you note, an hour of the major metros. Some of them then resent "having" to leave, many of those who do resent how different their kids' outlooks are from their own, and everyone left at home resents these things even more.
And, of course, the hipster/tribal kicks wing of the Democrats is helping push every step of the way. They're just hicks who don't know what's best for them, right?
I'm not at all sure what could happen in the future to break the deadlock between these competing forms of stupidity. I can absolutely see the GOP, over the 21st century, evolving to be genuinely populist, in which case it can assemble smashing majorities. It's less likely but still possible that the Democrats break the back of the tribalistic assholes who currently call themselves the left and manage to claw back a large chunk of working-class and rural voters, in which case they'll be able to hold and exercise power.
But... all of that might be short-circuited if the GOP decides to try to shoot the Republic in the back of the head next time it loses. 20 years in power will see them slowly bleed everyone except their hardcore base, and then they'll have to choose between holding the other 55-60% of the population at gunpoint and becoming Belarus or Russia, vs. ceding power and clawing back from a long period in the wilderness as the Democrats gradually overstep.
Some context. You're basically right about this.
https://apps.npr.org/unfit-for-work/
Wait is your contention that it's too hard to get on disability?
He's saying it's too easy to sneak into it.
Right that makes more sense
Very skeptical that any significant number of men on disability don’t require it (especially in the absence of excellent medical/psychological care, appropriate work accommodations and social support). How did you come to this view?
This is how I've come to this view:
https://mediadc.brightspotcdn.com/dims4/default/8796ae1/2147483647/strip/true/crop/2196x1300+0+0/resize/1060x628!/quality/90/?url=http%3A%2F%2Fmediadc-brightspot.s3.amazonaws.com%2Fcd%2Fa3%2F9d3603f7c287e3c4cc78c2ac2973%2Fmedi-graph1.jpg
Like, you can't seriously argue that we legitimately have more than twice as many people physically unable to do work now compared to when the ADA was passed.
I mean, I could. Maybe fewer disabled men have been wrongly rejected over time? Adjusting for population would also be a consideration. I think you’d need some kind of independent audit to really make the case. I’d be surprised if cases aren’t audited…
also this:
https://cdn.theatlantic.com/media/mt/business/men22.png
I think the contention is that enforcing the existing standards would be sufficient to reduce the number of people on disability payments.
That makes more sense
A lot of those 47% do pay payroll tax, and in calculating Americans’ tax burdens it is unfair and dishonest not to add payroll tax and income tax together.
“Broad based” doesn’t have to mean 100% of the population. Other things equal, the same amount of money being given to/taken from lower income people will have more macroeconomic effect than being given to/taken from higher income people. But if we also care about individual well-being as well as macroeconomic effect, then other things aren’t fully equal. Giving to/taking from lower income people has a bigger well-being effect than giving to/taking from higher income people. So when you are giving to people both factors push towards distributing more to the low income side of the scale. But when you are taking from people, one factor pushes downwards and the other factor pushes upwards, so you probably want to be targeting somewhere in the broad middle.
It seems a just a bit blithe to be calling for "draining the wallets" or talking about "people whose money we need to be taking away"! It sure would be nice to hear a philosophy major explain the moral philosophy of when precisely it is justified to make those impositions on peoples' wallets and whether the current moment really clears that hurdle.
Even if the politics were currently favorable to raising taxes, how many Democrats would be content with just that and not propose a ton of new spending? My experience of the 2020 primary tells me not many.
Inflation is also the solution to the problem. There is no need to “cut” anything, you just need to slow the rate of increase. If we increase defense spending 4% that’s actually a 4% cut. It makes a lot of political decisions much easier.
The rationale for why I have the entire non-tax sheltered portion of my savings in real estate is two-fold: either we make good policy, in which case demand for urban and suburban living rises due to steady population and living standards growth, which will drive steady growth in prices even with YIMBT policies…
Or we fuck up everything and the combination of NIMBY insanity and inflating our way out of vast accumulated debts holds real prices steady while fixed interest debts decline significantly in value.
In the best case scenario, a portfolio of rental real estate performs within shouting distance of equities, where my retirement savings is anyway. In the worst case, rental real estate is the only thing that performs even passably well over the coming half-century, even if still not great.
"I have the entire non-tax sheltered portion of my savings in real estate"
I really recommend portfolio diversification.
I have a good-sized chunk of emergency cash and a large retirement investment portfolio (I nearly max a 401(k), my wife maxes an IRA, and I max an HSA that we do not draw on ever) across domestic and global stock indices, and will transition that towards bonds and fixed income as I age. We also have a well-funded 529 for our child, which should suffice to cover between 50% and 100% of tuition if/when she pursues higher education.
But I’m decidedly pessimistic about the returns I will see in my retirement accounts over the coming half-century; real estate *is* my diversification.
About the only thing I do not own at present is crypto, and I’d sooner shoot myself.
Hmm. Maybe you could take a look at my investments while you're at it . . .
Lol I’m not a professional and enjoy not being sued!
Mostly we save too much so that will cover up whatever mistakes I make.
Popularist heal thyself.
Obviously no one is going to do any of those things for obvious political reasons. As well as the maybe less obvious reason that the economic zeitgeist takes a while to turn around as the whole Hamilton project group in the Obama administration shows.
Interestingly, I think Manchin is one of the few who has made transition. Biden has rhetorically started to pivot a bit and Republicans talk vaguely about spending, but no one's seems close to any sort of position to cut a deal.
But, by the time they might be it will probably be too late...
I've often wondered how many people really mean "deficit" when they say inflation, or vice versa. A lot of those former deficit hawk voices are the same ones making the most noise now about e.g. student loan forgiveness being inflationary. I guess the ideological directionality is the same in both cases, and yet...(meanwhile, progressives denying it'll impact the economy and will in fact spur further growth has a different kind of nostalgic scent).
The thing about ephemeral discretionary spending above income...I mean...what else is there to do with the money? The stimulus was a decent chunk of cash, but not "now I can afford my first down payment on a house" transformative level cash. And so many things weren't available for purchase at all*, for months/years. Saving for retirement is surely good, but with all the major world-shaking of the last few years, I can't blame people for being suspicious that they'll get to have a happy peaceful retirement at 65 or whatever. The peace of mind that comes from having a sound investment portfolio also just isn't the same kind of high one gets from, like, a PlayStation 5. Copes for stress matter a lot more when acute stress is high. (For that matter, the knowledge that rising inflation means holding onto money is extra bad - I think that also drives people to spend rather than save. Because they don't know about/don't have access to higher-yield savings/investment vehicles, which would blunt or negate the loss. If the only option is keeping it in a checking account or mattress, then, yeah - it makes a certain kind of sense to spend now, before that money is worth even less a month from now.)
And I think many people are also "spending down" a different type of savings, the pent-up social energy that Good Conscientious Liberals (stereotyping, sorry) kept safely at home during the worst of covid. That often does come with discretionary spending that people don't really "need"...it just feels extra nice to see friends again, and that turns into a great excuse for bacchanalia-levels of food and drink spending. There's surely also some factor of "gotta support impacted industries" which will take some time to sort out of the national psyche. Like, at this point I've sorta internalized that delivery food should "naturally" cost X amount more, and tips should be Y percent higher, even as the covid pressures on restaurants taper off. If menu prices suddenly dropped overnight to their 2019 levels, it'd probably take me awhile to adjust behaviour. That's part of the inflation-pops-up-elsewhere whack-a-mole: total spending might be the same, but if it's allocated really differently, that makes certain baskets of goods cheap at the cost of others being expensive. (And, yes, there's still a sizeable cohort of vaxxed-and-not-relaxed who I'm sure continue to spend differently vs 2019.)
*at remotely pre-covid prices, anyway. It's not like there physically weren't any more dumbbells, Nintendo Switch consoles, etc.
" The stimulus was a decent chunk of cash, but not "now I can afford my first down payment on a house" transformative level cash. "
Among the weirder parts of Matt's soak-the-UMC analysis above is that the (direct, rather than PPP) stimulus payments were means-tested. So the people with the extra money to throw around who are doing the direct spending in question (for the reasons you mention) are, at least in the first instance, not the people whose demand Matt is proposing to curb.
I thought there were three separate rounds of stimulus checks, but only the last round was means tested. Or maybe my income falls between the thresholds that they used?
All three rounds of stimulus checks were means-tested.
https://www.taxoutreach.org/tax-filing/coronavirus/what-to-know-about-the-economic-impact-payments-stimulus-checks/
I was pricing air b and bs for next summer in Scotland and Nova Scotia and the prices are already falling. The pent up demand for travel is almost exhausted
“But I don’t think it really was bad faith.”
2017-2018, republicans had complete control of the federal government. What did they, in all of their good faith, do with the deficit?