Obama’s Trickle-Up Economics by Paul Krugman

[applegrove]

Obama’s Trickle-Up Economics

by Paul Krugman at the NY Times

http://www.nytimes.com/2016/09/16/opinion/obamas-trickle-up-economics.html?_r=0

"SNIP..............


But be wary of polling on this issue. When Americans are asked how the economy is doing, many of them just repeat what they think they heard on Fox News: By large margins, Republicans say that unemployment is up and the stock market is down under Mr. Obama, the opposite of the truth. On the other hand, when you ask people how well they personally are doing, the Obama years have been marked by large improvements — a sharp increase in the percentage of Americans who see themselves as thriving.

So the good news is real. And it should (but won’t) finally break the grip of trickle-down ideology on much of our political class.

You know how the argument goes: Any attempt to help working families directly, we’re told, will backfire by hurting the economy as a whole. So we must cut taxes on those “job creators” instead, counting on a rising tide to raise all boats.

It would be an exaggeration to say that the Obama administration has done the reverse, but there definitely was an element of trickle-up economics in its response to the Great Recession: Much of the stimulus involved expanding the social safety net, not just to protect the vulnerable, but to increase purchasing power and sustain demand. And in general Obama-era policies have tried to help families directly, rather than by showering benefits on the rich and hoping that the benefits trickle down.

Now the results of this policy experiment are in, and they’re not bad. They could have been better: The stimulus should have been bigger and more sustained, and Republican opposition hamstrung the administration’s economic policy after the first two years. Still, progressive policies have worked, and the critics of those policies have been proved wrong.




...............SNIP"

[Wounded Bear]

1. K & R ......for visibility..nt

[pault420]

2. Yeah but rich have gotten richer and our debt has doubled.

I'm glad things have gotten better but at what expense, when does the debt become so much we can't pay it back and what happens then?

I think the jury is still out, better then what the republicans would have done, but wage inequality is worse then it's ever been I think more examining needs to be done.

[underpants]

3. Great Krugman article

[CentralMass]

4. It's just my opinion but I think that there is a disconnect here.

There are many people not making it or hanging on by the skin of their teeth. I find myself living near Portland, Oregon and the number of homeless people out here is tragic.

We have 47 mIllinois people living in poverty and 8 million of them have been added in the last 8 years. The cost of housing is a big factor. Many working people are living paycheck to paycheck and are woefully underfunded for retirement. Our kids are coming out of college with a mountain of debt and we are seeking economic parity with the third world with wages with these trade deals like the TPP.

The national debt, now at over 106% as a share of the GDP and the growing crisis with SS is a major issue with the massive national debt and SS reaching a point it is paying out more then it is taking in converging. SS is going to need some serious attention and there seems to be no political will to do so.

The US Government has plundered SS, they have written bad IOU's for decades, and I think that they and the financial powers that be mean to stiff us.

I don't buy that this is a trickle up economy. Trickle up to the top few percenters maybe. The President lobbied his lame duck Congress in 2010 to not let the Bush tax cuts automatically sunset as they were set to do.

If you look at the numbers. the budget deficit has shrunken since Bush left office but is still at around a half a trilion dollars
The reduction is mostly due to spending as a share of the GDP decreasing, while revenue as a share has not increased. I'd argue that cuts to social programs like food stamps during this oeriod are unconscionable.

[bhikkhu]

5. A couple of things about that...

Social Security hasn't ever been plundered, that's an oft-heard meme in RW circles with no basis in fact. Social Security is fully funded currently until 2034, and Medicare is fully funded until 2030. Projections out farther than that aren't especially useful, looking at all the past cries of imminent doom-and-disaster, many applied during the bush-years push for privatizing SS. Whether its a growing crisis or a shrinking crisis is often a matter of political agenda; whether there is a crisis at all is debatable. US IOU's are treasury notes, and the US government has never written a bad one. Hence our essentially ideal credit-worthiness.

Which leads to another thing, about the national debt. Payments on the national debt relate directly to the interest rate treasury notes pay. A very low-risk investment pays a very low interest rate, and our debt is financed at a historically low rate. So while the sum is larger, the cost of that sum has been shrinking as a percentage of federal spending for many years. In the beginning of Bill Clinton's first presidency, 15% of the federal budget went to debt service, currently only 6% of the budget goes to debt service. That's a pretty healthy improvement. What you owe is one thing, but what it costs you to carry debt is much more important.

Regarding poverty, nearly all of the increase occurred in the first year and a half of the recession, most of the during bush's last year. The current number is 43.1 million, down from a peak of 46.7 million.

Krugman's point is that things are moving in a good direction, which the current economic news exemplifies.