US recession fears are growing

I think you're mistaken about the topic here, title says "US recession fears are growing", but its true there's a lot of posting critical of Trump's tariffs on Chinese goods.

Consider how this would be interpreted using the OECD's Consumer Confidence index; if optimism makes the consumer less prone to save, and more inclined to spend money on major purchases, should one interpret a higher Chinese savings rate indicates greater pessimism about their longer term economic prospects? Maybe this is a cultural difference, I remember finding the higher Japanese saving rate positively praised as a cultural feature too.

This Consumer Confidence Index has been applied by the OECD since 1985, they used to survey every two months, currently its once a month, there's a lengthy record of data, the questions are unchanged. I wonder whether the Consumer Confidence Index is only accurate in western countries or fully developed economies, if savings a stronger custom in Asian or other cultures.

Seems that way, but one could also say they sacrifice, are more frugal, less susceptible to advertising, not really a consumer society.

 

I think there is a little of both. Cultural and feel good.
The US people just put the increased costs on their credit card. The Chinese suck it up and deny themselves.
But they are becoming more of a consumer nation, which is good for us I guess.
I just marvel that they can build a road across Pakistan to increase sales when we can't seem to fix our bridges. It seems like their method is more sustainable.

 

Whether the society of responsible savers is preferable to that of conspicuous consumers is a subjective preference. I posted consumer confidence index data because I dispute there are growing fears of a US recession, the OECD data speaks for itself; the US consumer confidence index is higher than the OECD's average and has been rising longer, this contradicts the claim there are growing concerns over an impending recession in the US.

As I noted before, economists and financial analysts pore over all sorts of market data for different forecasts, specialists earn an affluent living applying their conclusions in guiding investment, and there have been some who have reached the conclusion an inevitable economic depression is imminent. I'm skeptical because some have been telling us the sky is falling ever since Trump got elected, despite some extraordinarily positive economic performance figures since then.

Its a given that unless the US economy tanks and fails to recover before elections, Trump will win, so my hypothesis is that some analysts making dire predictions are hoping to induce a high enough fear of imminent recession to counteract the rising consumer confidence level.

They want to talk us into a recession, induce the sense employment is precarious, poorly paid and scarce, that rather than spend, we should save as much as we can because we are going to need as much as we can scrape together to survive the long winter ahead.

 

I think the concern is that the indicators have gone flat. I could tell you that Trump broke Obamas economy, but I won't.








Wages should be going thru the roof. We have had full employment for a long time.

Then there is this:
https://www.cnbc.com/2019/03/25/the-us-bond-yield-curve-has-inverted-heres-what-it-means.html

 

“A good tax system should try to make poor people rich, not rich people poor.” (Arthur Laffer, Presidential Medal of Freedom winner 2019).

 

That's why the highest marginal tax rate should be higher. Not lower.

 

The advisability of a higher marginal (or any other) tax rate is purely subjective, people like Laffer appear to support lower taxes (of all sorts) to encourage greater consumption (of all sorts). Critical lefties generally all support higher taxes (of all sorts), but especially much higher taxes on the wealthy. I just read Trump awarded Laffer the Presidential Medal of Freedom (the highest civilian award possible) and searched for a nice quote.

What is good about steep tax hikes on the wealthy is that it doesn't affect anyone endorsing them, its only the very wealthy. Additionally, since those affected already are very wealthy, they can afford the tax hike. Plus there's the perennial unmet needs of whatever people benefit from government spending. Generally the government is a lousy consumer (gets ripped off) and its investment or spending is inefficient and mismanaged.

The opposite side of the coin is that the wealthy employ people and make purchases, all of which are taxable and which will be reduced by whatever additional amount gets taken in the proposed tax hike, additionally, wealthy people are more mobile, they can move funds offshore, employ accountants and bookkeepers to characterize income and claim deductions, so a hike of their taxes just means a wealthy individual needs to spend more on bookkeeping, accounting and tax preparation. In France when they recently hiked taxes on the wealthiest many of them moved to foreign places (Gerard Depardieu), these are more mobile people, they've got their own jets, have properties abroad, usually do banking internationally.

If you've got a credible argument for change in fiscal policy, it would be great to read about it, (don't think it goes here though). Much of what I read about taxes on the wealthy have no credible arguments, its just advocacy.

 

I just have the one chart showing that tax revenue as a percent of GDP occurs historically at around 50% top rate.

 

The problem is obviously that you only read arguments for which you agree with Sans the fact that what you are saying is absurd.

Are you claiming that no one should be taxed - or just that only those who are not wealthy should be taxed ? While no one likes taxes - we do like some of the stuff it pays for.

The question that the material you have been reading has clearly omitted is who benefits more from the free stuff provided by taxes - the rich or the poor ? This is not to argue that those who benefit more should necessarily pay more - that will come later.

The first thing one needs to understand in order to have a coherent discussion is the benefit equation - and it seems obvious that you don't as if you did you would not be claiming there are no credible arguments. It is one thing to disagree with an argument - quite another to claim that an argument is not credible.

So then "Who benefits more " ? and why.

 

And you should understand by now how that destroys wealth.

Lol, complaining about simplicity . . . while offering a far more simplistic "argument." China is surpassing all of these other countries in GDP largely thanks to their population size. Try looking at per-capita GDP. Compare the US to China. Now think about your position again.

Trade creates wealth for both saids of the transaction. Your fantasy scenario about a country that only consumes and never produces is complete nonsense.

You haven't actually addressed most of the posts, and yes, you have resorted to strawmen. I'm well aware of what the term means and have shown where you have introduced strawmen.

Our manufacturing production is at record highs. Yes, trade has made us more wealthy, even when it has costs us manufacturing jobs, because what you still don't seem to understand is that manufacturing is not the only form of production.

Yes, trade has increased our GDP. You can keep making doe-eyes at neo-Marxist mercantilism and attacking capitalism all you want, but the facts are on the side of the free market principles that you the the rest of the Trump wing of the party have abandoned. Worse, your wing has also abandoned the Constitution in pursuit of trying to turn back the clock of economics over 2.5 centuries.

 

It does look so, that there will be a recession soon, probably in 2020. If there is one, all the Democrats and left would blame Trump for it, even though it wasn't really his fault. The Fed kept interest rates artificially too low, below the market rate at 0.25 for several years, and once malinvestments and debt from that time falter soon, we will be in a recession. The people will blame the free-market again, and guaranteed we will get a super progressive, Bernie or Warren.