For the purposes of this thread, the relevant question regarding tax breaks is whether the tax breaks really will increase economic growth over the long term or merely offer a deficit-induced sugar high.  I tend to believe the latter, and I even tend to believe that the latter will not last all that long because we were already close to full employment (granted, with widespread underemployment, but just getting to full technical employment is a pretty big moment).

 

Quite honestly, I think we'd have done ourselves more long-term favors by increasing taxes, even though the tax breaks have been fairly good for me as an equity investor with almost no fixed-income assets in my portfolio.  Eliminating the federal deficit and paying off the federal debt over 30 years (as the various securities that represent it become due, though most would need to be refinanced frequently during that time because the vast majority of the federal debt is actually due in less than 1 year at any given time, it's just constantly rolled over) would force capital to look for other projects.  Since the private sector is usually more dynamic, innovative, and profitable than the public over time, but also higher risk, that would mean both a more productive economy and slightly higher average yields on debt instruments (which correspondingly would make equities look slightly less attractive).  That wouldn't be the worst thing in the world, and I say that even as someone who could lose out if equity markets cool off.  Equity markets are currently nonsensically high and debt markets are currently nonsensically low.  More importantly, the rates that ordinary folks (I guess I count myself as a non-ordinary folk here since I do actively manage my own equity portfolio) get on their savings are much more tied to debt returns than equity returns.  Is anyone here even old enough to remember when savings accounts might give 6% returns?  My parents are.  They were already below that when I opened my first bank account, though, and they've basically never gone above it in my adult life.  The PayPal money market for a time was at about 5.25% and I thought that some of the best safe-money savings returns I could ever dream of.

... paying off the federal debt over 30 years (as the various securities that represent it become due, though most would need to be refinanced frequently during that time because the vast majority of the federal debt is actually due in less than 1 year at any given time, it's just constantly rolled over)

 

Realistically, since neither party is disciplined enough to run a surplus consistently, the only way the federal debt can be managed is through inflation. All long-term plans must take this into account.

Running a surplus is actually easy. Don't pig out on military and surpluses come. It's proven itself.

Running a surplus is actually easy. Don't pig out on military and surpluses come. It's proven itself.

 

It's how most other countries in the world do it.  They don't have our military industrial complex calling the shots though...

Running a surplus is actually easy. Don't pig out on military and surpluses come. It's proven itself.

 

It's how most other countries in the world do it.  They don't have our military industrial complex calling the shots though...

 

Two takes on this:

 

1. You're right.

 

2. However, we are ill equipped at the moment for modern frontiers. For example, we have less "ice breaking" ships than China, Norway, Russia, Finland, Germany, Canada, and Denmark. As the earth continues to be warm, territory in the Arctic is going to be contentious, and we need to be ready.

 

I think we could take care of both, cut reckless spending for ammunition that we already have stockpiled, for instance, and focus the spending on salaries and modernity.

Running a surplus is actually easy. Don't pig out on military and surpluses come. It's proven itself.

 

It's how most other countries in the world do it.  They don't have our military industrial complex calling the shots though...

 

Two takes on this:

 

1. You're right.

 

2. However, we are ill equipped at the moment for modern frontiers. For example, we have less "ice breaking" ships than China, Norway, Russia, Finland, Germany, Canada, and Denmark. As the earth continues to be warm, territory in the Arctic is going to be contentious, and we need to be ready.

 

I think we could take care of both, cut reckless spending for ammunition that we already have stockpiled, for instance, and focus the spending on salaries and modernity.

 

Why build icebreakers when this factory in muh district makes F35s that no one wants?  I thought you libtards said global warming is going to take care of that for us?

... paying off the federal debt over 30 years (as the various securities that represent it become due, though most would need to be refinanced frequently during that time because the vast majority of the federal debt is actually due in less than 1 year at any given time, it's just constantly rolled over)

 

Realistically, since neither party is disciplined enough to run a surplus consistently, the only way the federal debt can be managed is through inflation. All long-term plans must take this into account.

 

Agreed.  Agreed kicking and screaming, but agreed.  Which is another reason I continue to stay overwhelmingly in equity assets.

 

Running a surplus is actually easy. Don't pig out on military and surpluses come. It's proven itself.

 

You could just as easily say "don't pig out on entitlements."  Those budgets are substantially larger than the military.

 

But more importantly, you could say "don't cut taxes when you're already running a deficit."  The argument that increased taxes can reduce economic activity and therefore not bring in as much revenue as you hope has merit.  The argument that tax cuts "pay for themselves" has almost never worked (and when it did, it was because the original rates were something like 90% on paper but were also very easily avoided).

Social Security and Medicare are not entitlements. People have money deducted from each paycheck and their employer matches it.

Cross posted from the terrorism thread...

 

^Bring 'em to Cleveland!!

 

Can anybody explain the implications of increasing tariffs on steel and aluminum?  From a domestic standpoint it doesn't seem negative, though I know that it won't mean that thousands of jobs will return to places like the Flats.  Many jobs have been lost just due to an increase in technology while other countries have been importing steel.

^Even if you're thinking very locally, you don't think raising the cost of key raw materials  seems negative for the competitiveness of Cleveland manufacturers?

^That's why I was asking- how far off are those key raw materials in price when compared to what is produced here?  If they're lower than what is produced here, would raising prices on steel and aluminum not made in the US negatively impact the price of steel here? 

https://finance.yahoo.com/news/trump-will-make-beer-expensive-152234604.html

 

More than half of the beer produced every year in the U.S. is packed in aluminum cans or aluminum bottles. The beverage and brewery industry has been relying on imported aluminum to make 96 billion cans annually. Cans account for about 9.76% of the brewers’ overall production cost of beer, according to a report from John Dunham & Associates last June. 

 

A 10% tariff aluminum will create a new $347.7 million tax on America’s beverage industry, according to a statement from Beer Institute on Thursday.

 

Your beer prices will likely go up.

Oh, this is awesome, something I kind of know a little bit about, but don't really know the correct answers due to lack of information on my side.

 

Raising the cost of raw materials that are imported could lead to an increase in raw material domestically being mined, etc.  How much do we do that now a days in the USA?

 

If we have abundant supply of these raw materials but it isn't competitive right now to mine because of cheap international product, than it would inentivize the USA to mine more and creat jobs in mining.  IT would then raise the cost of production for steel and aluminum for Cleveland Steel Beam Company A, but that woud be passed onto the rest of the USA Market, so it could be a readjustment, theoritically.

 

Would it be a net gain?  Increase in jobs, increase in cost of production, increase in cost of construction, more money out of pocket for USA taxpayers.  Is the increase in jobs for mining enough to offset the rest of those?  I highly doubt it.

Demand for your product will go down if the price increases.  Decreased demand leads to job losses.  One industry gains other lose. 

^Demand for steel and aluminum won't dwindle if there is no other choice.  If the tariffs make everything competitive worldwide.

 

Unless they start going to wood or something new, it won't stop demand of an inelastic product

https://finance.yahoo.com/news/trump-will-make-beer-expensive-152234604.html

 

More than half of the beer produced every year in the U.S. is packed in aluminum cans or aluminum bottles. The beverage and brewery industry has been relying on imported aluminum to make 96 billion cans annually. Cans account for about 9.76% of the brewers’ overall production cost of beer, according to a report from John Dunham & Associates last June. 

 

A 10% tariff aluminum will create a new $347.7 million tax on America’s beverage industry, according to a statement from Beer Institute on Thursday.

 

Your beer prices will likely go up.

 

Just to get a dollar price amount per can - case:

 

$347,700,000 / 96,000,000,000 cans = $0.00362/can x 24 cans = $0.08688/case increase in price

 

Let me know if I didn't get that right

 

 

^Demand for steel and aluminum won't dwindle if there is no other choice.  If the tariffs make everything competitive worldwide.

 

Unless they start going to wood or something new, it won't stop demand of an inelastic product

 

If you are going to build an office building and you already have tight margins.  You just won't build it.  You can't charge more for your office space than other products in the market.  If the price of a car goes up, I might wait another year or 2 to buy one.

 

And we haven't even factored in any retaliatory tariffs.

 

 

 

 

The EU announced that they will put a tariff on Harley Davidson motorcycles.  Double whammy for them now.  Oh well all of those well paid workers at Harley could get those FoxConn jobs down state.  Or maybe one of those coal mining jobs.  MAGA

^Demand for steel and aluminum won't dwindle if there is no other choice.  If the tariffs make everything competitive worldwide.

 

Unless they start going to wood or something new, it won't stop demand of an inelastic product

 

If you are going to build an office building and you already have tight margins.  You just won't build it.  You can't charge more for your office space than other products in the market.  If the price of a car goes up, I might wait another year or 2 to buy one.

 

And we haven't even factored in any retaliatory tariffs.

 

 

 

 

 

Idk, I'm talking in general, maybe it's a big difference and maybe it isn't.  For beer cans, it is $0.00362 can increase in cost.  What would it be for an automobile?  I have no idea

 

What would it be for an office building?  I have no idea the costs associated there so I can't comment.  But I think saying people won't build office buildings because the cost is higher is false.  There is always demand for office space as the population and economy grows.  So they build it unless people decide to only work at home or work in a parking lot.  I would say office space is inelastic in relation to office jobs, you have to have it.  Economics is never a zero sum game, and when you talk about price inelastic items like steel and aluminum, it really does not change demand much.  Will it increase aluminum and steel by the % amount of the tariff?  That's another question which isn't cut and dry.  I would assume that miners then have incentive to to get their costs low enough through innovation and technology to beat the price of the newly tariffed imports and the price wouldn't be exactly the amounts of the tariffed imports, they would try to go a bit lower so they buy their product, otherwise it wouldn't matter, right?

 

But to sum it up, I have no idea if it's good policy or not

The EU announced that they will put a tariff on Harley Davidson motorcycles.  Double whammy for them now.  Oh well all of those well paid workers at Harley could get those FoxConn jobs down state.  Or maybe one of those coal mining jobs.  MAGA

 

People in Europe don't give a crap about Harleys. Most riders in Europe don't have a license that allows them to ride a bike over 600cc let alone 883-1340cc.

17% of their worldwide sales comes from EMEA (Europe, Middle East and Africa).  It's also the only part of the world with any growth.  About 40% of their sales come from international markets.  Let's hope they all don;t put a tariff on Harleys.

 

https://www.motofire.com/2017/02/harley-davidson-sales-europe-homeland-us/

 

 

^Demand for steel and aluminum won't dwindle if there is no other choice.  If the tariffs make everything competitive worldwide.

 

Unless they start going to wood or something new, it won't stop demand of an inelastic product

 

If you are going to build an office building and you already have tight margins.  You just won't build it.  You can't charge more for your office space than other products in the market.  If the price of a car goes up, I might wait another year or 2 to buy one.

 

And we haven't even factored in any retaliatory tariffs.

 

 

 

 

 

Idk, I'm talking in general, maybe it's a big difference and maybe it isn't.  For beer cans, it is $0.00362 can increase in cost.  What would it be for an automobile?  I have no idea

 

What would it be for an office building?  I have no idea the costs associated there so I can't comment.  But I think saying people won't build office buildings because the cost is higher is false.  There is always demand for office space as the population and economy grows.  So they build it unless people decide to only work at home or work in a parking lot.  I would say office space is inelastic in relation to office jobs, you have to have it.  Economics is never a zero sum game, and when you talk about price inelastic items like steel and aluminum, it really does not change demand much.  Will it increase aluminum and steel by the % amount of the tariff?  That's another question which isn't cut and dry.  I would assume that miners then have incentive to to get their costs low enough through innovation and technology to beat the price of the newly tariffed imports and the price wouldn't be exactly the amounts of the tariffed imports, they would try to go a bit lower so they buy their product, otherwise it wouldn't matter, right?

 

But to sum it up, I have no idea if it's good policy or not

 

So in essence everyone's costs will increase to prop up one industry.  Everyone will have less discretionary money unless they own or work for a steel company.

^Well if you want to get a bit more technical, anything related to the steel industry production would have increase in jobs.  Yes, it would increase cost for everyone.  Would the benefit of more jobs in relation to steel and aluminum mining make up for the increased costs across the board?  I kind of doubt that so my guess is it isn't good policy.  But as far as decreasing demand, I would guess that it would have a very low effect on demand

17% of their worldwide sales comes from EMEA (Europe, Middle East and Africa).  It's also the only part of the world with any growth.  About 40% of their sales come from international markets.  Let's hope they all don;t put a tariff on Harleys.

 

https://www.motofire.com/2017/02/harley-davidson-sales-europe-homeland-us/

 

 

 

I don't like how those three regions are combined like that. The cultural characteristics of those regions are very different. Harley is all about culture.

So in essence everyone's costs will increase to prop up one industry.  Everyone will have less discretionary money unless they own or work for a steel company.

 

If we lose the entirety of our steel industry, how do we make tanks?  I know we don't need tanks right now but what if we do.  "Hello, we see you've landed some tanks here.  We'd like to order 200 for ourselves.  Could you put those on the next boat please?  Thanks."

We are in no danger of losing the entire steel industry.

One thing Trump said in justifying these protectionist policies is that other countries are doing it to us.  As a theoretical matter, a free market believer wouldn't even care about that (positing that protectionist measures actually hurt the imposing country more than the intended target).  But I'm also curious, just given Trump's rather strained relationship with the truth, if that's even the case.  How high are other countries' tariffs on our goods?  China is a WTO member now, there are limits on how much they're supposed to be able to do that (though WTO enforcement can admittedly be a little hit-and-miss).

We are in no danger of losing the entire steel industry.

 

It almost happened 15 years ago.  I was in it at the time.  Why buy a single ounce of steel from a US producer when it's so much cheaper not to?  And unlike other types of business equipment, a blast furnace cannot be restarted after it's shut down.  There is an absolute need to keep them hot or they collapse.

 

It almost happened 15 years ago.  I was in it at the time.  Why buy a single ounce of steel from a US producer when it's so much cheaper not to?  And unlike other types of business equipment, a blast furnace cannot be restarted after it's shut down.  There is an absolute need to keep them hot or they collapse.

 

Yes it can. It can't be rebuilt after its demolished, however.

WTO chief makes rare warning of trade war over U.S. tariff plan http://reut.rs/2FhrOfR

When you're a nation too greedy and corrupt to implement remedies....

 

Bill Gates: We will have another financial crisis like the one in 2008—it's a 'certainty'

https://www.cnbc.com/2018/03/06/bill-gates-it-is-a-certainty-we-will-have-another-financial-crisis.html

When you're a nation too greedy and corrupt to implement remedies....

 

Bill Gates: We will have another financial crisis like the one in 2008—it's a 'certainty'

https://www.cnbc.com/2018/03/06/bill-gates-it-is-a-certainty-we-will-have-another-financial-crisis.html

 

That's not exactly a bold prediction...

For an optimist like Gates it is.

For an optimist like Gates it is.

 

If you follow macro-economics, a recession comes every 7-9 years.  We are beyond that time frame so a downturn is likely at some point soon.

#BREAKING: Toys 'R' Us to close all remaining US stores, report says - https://t.co/dBS09VxsBl

IHeartMedia, owner of 12 radio stations in Northeast Ohio, files for bankruptcy

 

IHeartMedia Inc., the biggest U.S. radio-station owner, filed for bankruptcy with a plan to halve its debt load of more than $20 billion, the legacy of a leveraged buyout that hobbled the company as the digital era spawned new rivals.

 

IHeart, with about 850 radio stations and 17,000 employees worldwide, filed for Chapter 11 protection on Wednesday in Houston, a move that allows iHeart to keep operating while it tries to cement its turnaround plan. The deal still needs approval from the court and some holdout creditors, and the company could hear again from John Malone's Liberty Media, which has said it wants a stake in the reorganized media giant.

 

IHeart owns 12 radio stations in the Cleveland and Akron markets , according to its website. In Cleveland, the roster includes Majic 105.7-FM, 106.5-FM The Lake, 96.5 KISS FM, 99.5 WGAR-FM, 100.7 WMMS -- The Buzzard and Newsradio WTAM 1100-AM.The Akron stations are WKDD-FM/98.1, WHLO-AM/640 and Fox Radio 1350-AM. The Canton stations are Rock 106.9-FM, My 101.7-FM and 99.7 FM.

 

http://www.cleveland.com/entertainment/index.ssf/2018/03/iheartmedia_major_us_radio-sta.html

^ Crazy ... internet stations are putting a hurt on FM.

If we do see an uptick in corporate bankruptcy filing again, and large corporate bankruptcy filings in particular, I have a strong feeling that "leveraged buyout" will feature in the background stories of a lot of them.  People got absolutely drunk on near-0%-interest money as borrowers, and as lenders had to lend prodigious amounts of it to get significant interest payments.  Meanwhile, the screaming ascent of the equity markets, most visible in public equity markets, carried private equity prices with it as well.  In other words, people borrowed a lot of money (even if at very low interest rates) to spend a lot of money buying equity ownership, often at very generous premiums.

 

I haven't looked at the bankruptcy court documents for iHeartRadio, but my gut feeling is that at an operational level, all or almost all of those stations are still profitable.  (It would take monumental operational incompetence to make something like 106.5 The Lake an actual money-loser month-to-month, absent debt service.  Radio talent, broadcast rights, and broadcast content isn't necessarily cheap but it's not that expensive for a station with that kind of audience.)  Some of the stations might get sold, but I doubt many (or even any) will get actually shuttered--and even whether they'll get sold might still be up in the air (no pun intended).

IHeartMedia, owner of 12 radio stations in Northeast Ohio, files for bankruptcy

 

IHeartMedia Inc., the biggest U.S. radio-station owner, filed for bankruptcy with a plan to halve its debt load of more than $20 billion, the legacy of a leveraged buyout that hobbled the company as the digital era spawned new rivals.

 

http://www.cleveland.com/entertainment/index.ssf/2018/03/iheartmedia_major_us_radio-sta.html

 

Yep, paying too much for a company, and then paying high salaries to the management, is not a recipe for success (unless you're the CEO...)

IHeartMedia, owner of 12 radio stations in Northeast Ohio, files for bankruptcy

 

IHeartMedia Inc., the biggest U.S. radio-station owner, filed for bankruptcy with a plan to halve its debt load of more than $20 billion, the legacy of a leveraged buyout that hobbled the company as the digital era spawned new rivals.

 

http://www.cleveland.com/entertainment/index.ssf/2018/03/iheartmedia_major_us_radio-sta.html

 

Yep, paying too much for a company, and then paying high salaries to the management, is not a recipe for success (unless you're the CEO...)

 

The hosts on 700WLW all have other jobs, except for Bill Cunningham. 

 

 

Yep, more winning!!

 

Economic growth well below expectations in first quarter of 2018

http://thehill.com/policy/finance/394591-economic-growth-slows-to-2-percent-in-q1

Yep, more winning!!

 

Economic growth well below expectations in first quarter of 2018

http://thehill.com/policy/finance/394591-economic-growth-slows-to-2-percent-in-q1

 

but but muhhh tax cuts are gonna jump start the economy.

Yep, more winning!!

 

Economic growth well below expectations in first quarter of 2018

http://thehill.com/policy/finance/394591-economic-growth-slows-to-2-percent-in-q1

 

but but muhhh tax cuts are gonna jump start the economy.

 

I think he said it was supposed to "supercharge" the economy.  It's like he was almost admitting the economy was already doing well. Of course he couldn't actually say it was doing well, otherwise he couldn't have enacted the cuts that made billionaires even more bilionairy. ?

Well this means we have to abolish the EPA

These are some pretty interesting Amazon job postings in Newark NJ. It suggests they won the sweepstakes....

https://t.co/GhNICF8DnE

Cities: Forget Amazon #HQ2, and invest in your own startups https://trib.al/2KNS2Pf

The U.S. labor shortage is reaching a critical point

Private payrolls grew less than expected in June, likely due not just to a slowdown in hiring but also a decline in the labor pool.

For the first time, there are more job openings than there are eligible workers to fill them.

Economists expect wage pressures to continue building as part of increasing inflation.

https://www.cnbc.com/2018/07/05/the-us-labor-shortage-is-reaching-a-critical-point.html

I dunno, employers are just adamant about not raising wages under any circumstance. God forbid they pay what the market dictates.

I dunno, employers are just adamant about not raising wages under any circumstance. God forbid they pay what the market dictates.

 

That's why they love immigrants, but love Republican tax giveaways more. 

I dunno, employers are just adamant about not raising wages under any circumstance. God forbid they pay what the market dictates.

 

They can resist for a while.  But the market cannot be resisted forever.  Of course, they can try to exit or change the stage of the market (outsourcing, shipping jobs overseas), but that's getting harder than people think simply because emerging markets also aren't as cheap as they used to be.  China, in particular, is nowhere near as cheap a place to do business as it used to be.