With all the nonsense that is cramming the media in the past few days, it is worth the time to remember just a few facts that are the reality of the American economy.
1. Over the last year and a half, only one out of six quarters had growth in the American gross domestic product at a rate above 2%. The last three quarters have each shown a rate of growth that was barely positive. In other words, the economy is stagnant and sitting right on the edge of recession.
2. Over the last two years, corporate profits in America have been declining. Of all the numbers that are leading indicators of future economic growth, the trend in corporate profits is the most important. The decline in these profits indicate that economic growth may completely cease and the country go into a recession.
These are not disputed facts. The GDP figures are official government statistics; so too are the figures for corporate profits. No sane economist would argue that declining profits help the economy. The drag on economic growth from declining corporate profits is a basic truth of economics.
Now think about these facts in the context of the election. Again, there are two points that stand out above all else.
1. Hillary Clinton wants to continue and, indeed, intensify the policies that have resulted in the terrible performance of the economy. Continuing these policies are not suddenly going to produce a different result. If we are lucky, Hillary's plans would keep the economy stagnant. If we are not lucky, Hillary's plans would force the country into a major recession.
2. Hillary's tax plans include major increases in corporate taxes. Trump's plans are just the opposite and call for major decreases in corporate taxation. Hillary's plans would mean a substantial cut in after tax corporate profits. That means that economic growth takes a substantial hit. Trump's plans again are the opposite, and they have the opposite effect. Trump's corporate tax plans would mean a substantial increase in economic growth. That means more jobs, greater wealth for the American people and even growing revenues for the government.
If you would like to take a break from the endless bickering about who called whom fat, think about the economy and how the candidates' plans affect it.
1. Over the last year and a half, only one out of six quarters had growth in the American gross domestic product at a rate above 2%. The last three quarters have each shown a rate of growth that was barely positive. In other words, the economy is stagnant and sitting right on the edge of recession.
2. Over the last two years, corporate profits in America have been declining. Of all the numbers that are leading indicators of future economic growth, the trend in corporate profits is the most important. The decline in these profits indicate that economic growth may completely cease and the country go into a recession.
These are not disputed facts. The GDP figures are official government statistics; so too are the figures for corporate profits. No sane economist would argue that declining profits help the economy. The drag on economic growth from declining corporate profits is a basic truth of economics.
Now think about these facts in the context of the election. Again, there are two points that stand out above all else.
1. Hillary Clinton wants to continue and, indeed, intensify the policies that have resulted in the terrible performance of the economy. Continuing these policies are not suddenly going to produce a different result. If we are lucky, Hillary's plans would keep the economy stagnant. If we are not lucky, Hillary's plans would force the country into a major recession.
2. Hillary's tax plans include major increases in corporate taxes. Trump's plans are just the opposite and call for major decreases in corporate taxation. Hillary's plans would mean a substantial cut in after tax corporate profits. That means that economic growth takes a substantial hit. Trump's plans again are the opposite, and they have the opposite effect. Trump's corporate tax plans would mean a substantial increase in economic growth. That means more jobs, greater wealth for the American people and even growing revenues for the government.
If you would like to take a break from the endless bickering about who called whom fat, think about the economy and how the candidates' plans affect it.
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