Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: GDP

April 12, 2021

On the Relationship Between Infrastructure Spending and Corporation Tax

The Biden administration has come out with a $2 trillion infrastructure plan. The United States is very behind on infrastructure spending–according to the American Society of Civil Engineers, the US faces a $2.59 trillion infrastructure shortfall over the next 10 years. Biden’s bill isn’t large enough to fill that gap, and a significant percentage of its spending is for other purposes. $400 billion is slated to go to nursing home services, a pressing need in its own right, but not one of the needs which the ASCE tracks in its reports. If you add it up, it looks like roughly half the Biden bill’s spending directly addresses the needs identified by our civil engineers, while the other half funds other projects. There’s nothing inherently wrong with this–it’s very normal for politicians to attach pet programs to popular bills that meet essential needs, and many of Biden’s pet projects have value. But it does mean that this bill’s infrastructure spending is less substantial than it initially appears. It will still leave us with a significant infrastructure shortfall. The more interesting issue–and the one I wish to discuss at some length–is the decision to pair this infrastructure bill with an increase in the marginal corporation tax rate.

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December 29, 2020

Why Larry Summers is Wrong About $2,000 Stimulus Checks

Larry Summers, the former director of the National Economic Council under President Obama, has publicly spoken out against the $2,000 stimulus checks proposed by Bernie Sanders and President Trump. Summers’ argument is simple–the checks are projected to increase disposable personal income as a ratio of GDP to an unusually high level. For Summers, the fact that this figure would be elevated above normal levels is itself cause for concern. But the situation we are in is unprecedented, and it calls for an unprecedented response. Let’s run through some of the arguments.

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November 13, 2020

The Unfolding Economic Catastrophe in Europe

As the figures for the third quarter come in, I am growing very worried about the future of Europe. Coronavirus has unleashed a disaster there that is hard to comprehend. The numbers are extraordinarily terrible. Let me show you what I mean.

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August 9, 2020

These Executive Orders Make No Sense

After weeks of failed negotiations between the House and the Senate, the President is attempting to provide additional stimulus through executive action. The orders are probably unconstitutional–all money bills must begin in the House of Representatives, per the “origination clause”. They will be challenged in the courts, and I doubt they come into force. That said, if the President had ordered a strong aid package, I would be willing to consider supporting a challenge to congress’ spending authority. Congress has neglected its duty to protect Americans from the economic consequences of our anti-coronavirus policies. The scale of the disaster is so immense that I would support trying anything that might help tens of millions of unemployed people stay in their homes and put food on the table. When wealthy senators sit on their hands and deny ordinary people the means of subsistence because they feel offering aid might diminish their “incentive” to take jobs that pay less than $600 a week, they get no sympathy from me.

Unfortunately, I don’t get to make a provocative argument that the President is justified in running over congress, because this President has taken action that doesn’t make any sense.

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December 19, 2019

Impeachment is a Mistake

Remember 2017? President Trump tried to repeal and replace Obamacare. Over the summer, the Senate debated various permutations of healthcare legislation, and Trump’s approval rating sagged. When the House leadership introduced their first plan, on March 6th, Trump’s approval rating was 44%. When the Senate defeated even the “skinny repeal” bill on July 28th, Trump’s approval rating had been reduced to 38%. From there, the president turned to cutting taxes for rich people. When the tax legislation was first introduced, on November 2nd, Trump’s approval rating remained 38%. When the Senate passed the legislation under budget reconciliation a month later, Trump’s approval figure sagged as low as 36%. Over the course of that year, Trump had lost about 18% of his approval, and he’d lost that approval betraying his core supporters on issues that mattered to them. He had tried to take their healthcare away, and he had taken their money and handed it to rich people. Many Americans who voted for Trump could see that this stuff was not cool. The opposition was making real progress.

Then, everything changed. By February of 2018, Trump’s approval rating was back over 40%. A year later, it was 42%, and as I write this Trump’s approval rating is over 43%. Virtually all of the progress the opposition made in the first year of the Trump presidency has been rolled back. What happened? We stopped talking about issues and started talking about the culture war and character issues. Let me show you the steps.

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