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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ
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Why Trump is a Potential Disaster for the Economy

22 April 2017 | Pago Pago, American Samoa
Kimball Corson
Trump wants to hugely cut government spending (except of course for defense), an agenda republicans applaud. Of course, as usual, they all overlook that expenditure today is income tomorrow. That oversight is a republican trademark. So what we are saying is that Trump wants to hugely cut private incomes.

But he is going to cut taxes on the rich, too. Now, republican lore and classical economics tell us that will increase private spending and investing, but that is false. As the new Keynesians have shown, cutting taxes on the rich, with such great income inequality, simply causes them to hoard more, not spend more. They already have more money than they can or want to spend, so giving them more isn't going to fix that. They will not spend or invest more. So much for that expenditure source. So no real gain there.

But cutting taxes on the rich will increase the deficit, which increases expenditures, except that Trump also wants to cut that deficit, like most republicans, but that too will reduce government spending and private incomes. It shrinks the economy, other things equal. And our economic growth already is not nearly what it could be. Trump has already clobbered tourism to the US, a multi-billion dollar industry, and foreign student applications to US colleges are down in the range of 40 percent. Trump is an income wrecking ball on wheels.

But then Trump has great spending plans, but they are going nowhere. The Mexican Wall has suffered a quiet death, as illegal border crossings have dropped sharply toward zero and our Homeland Security secretary explains the wall is not needed and a dead issue. So much for that source of expenditure.

But then there is Trump's $1 tillion dollar infrastructure program of planned expenditure. First, that has taken a backseat to bombing Syria and threatening North Korea, at least for now. But secondly, good luck on getting a $1 trillion dollars out of a republican congress for anything. They will go along with Trump on cutting expenditures, but they cut him off on any new expenditure of note. They are still chafing over Obamacare and its big taxes and expenditures still being in place. Forget infrastructure.

So where does this leave us going forward? If we do go forward, the prospect is for a seriously slowed and damaged economy and reduced employment. This boom cycle is already very long in the tooth and Trump would well break it and throw us into a recession, if he does what he says he will and doesn't, what he can't.

There is little sunshine down the road, unless Trump abandons his plans and plays his dog and pony show war games and listens to Kushner and Cohen on how to live in an economic stall mode and divert attention elsewhere.
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Vessel Name: Altaira
Vessel Make/Model: A Fair Weather Mariner 39 is a fast (PHRF 132), heavily ballasted (43%), high-aspect (6:1), stiff, comfortable, offshore performance cruiser by Bob Perry that goes to wind well (30 deg w/ good headway) and is also good up and down the Beaufort scale.
Hailing Port: Lake Pleasant, AZ
Crew: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
About:
Kimball Corson: I am a 75 year old solo sailor, by choice. However, I did take on a personable, but high maintenance female kitten, now a full grown cat, named KiKiPoo when she is sweet, or KatKatPo after she has just killed something like a bird or bat. [...]
Extra:
Although I was a lawyer and practiced law with good success for thirty years, creating significant new law, I never really believed in the law, the politics of law or in the over reaching self-interest of most lawyers I met. Too much exposure to Nietzsche and other good and seriously thoughtful [...]
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Profile

Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2016
Port: Lake Pleasant, AZ