«I`m a capitalist, but here`s the deal…..» president Biden said. He also bashes trickle-down economy. Steve Forbes said Biden is not a capitalist. He is a far-left politician. Economists like Forbes are concerned about the rising inflation.
Core PCE prices in the US, which exclude volatile food and energy cost, increased 3,1 percent YoY in April of 2021, following an upwardly revised 1,9 percent gain in March and compared to market forecasts of 2,9 percent.
It is the highest rate since the 1990s, bringing it well above the Fed`s 2 percent target.
The Core Personal Consumption Expenditure Price Index provides a measure of the prices paid by people for domestic purchases of goods and services, excluding the prices of food and energy. The core PCE is the Fed`s preferred inflation measure, and the targest is 2 percent.
President Biden released a proposal that calls for $6 trillion in additional spending over the next decade. An ambitious plan that would run a $1,8 trillion federal government deficit despite a raft of new tax increases.
The budget proposal incorporates the American Jobs Plan, the American Families Plan and the $4 trillion infrastructure. Looking for the expectations about unemployment, the White House sees it falling to 4,7% by the end of 2021, 4,1% in 2022, and 3,8% the following year. They expect it will remain at 3,8% for the ensuing seven years.
The Treasury Department said that the deficit for the first seven months of fiscal 2021 still hit a new record of USD 1,932 trillion, which is a 30% increase from the same period of fiscal 2020.
Somebody have to pay for all the debt, and that is the people. To solve that, Biden wants people to pay more tax, but inflation (higher prices) is also a form for tax. A hidden tax.
Trump cutted taxes and MSM said he was crazy. It is the republicans job to have as low taxes as possible. It is their policy. The same cannot be said about the democrats.The Biden administration will discuss spending with top lawmakers this week, and republicans think it sounds scary.
Biden wants to increase the taxes and that can have an impact on businesses and money makers. On top of that we also have inflation, which is also a hidden tax. Add higher interest rate on top of that. Bill Clinton did much of the same in the 90`s and as long as I can remember, it went well. But this time is probably different with covid-19 and lockdown.
Investors expected more than 1 million jobs in april, but only 266 thousand is what the Biden administration saw come in. They also expected unemployment rate at 5,8% but it jumped to 6,1% and all this was a big, big, big surprise to the market, and investors sent the market down on Monday.
Things have changed in the White House, and Maria asked Mr Mulvaney when was the last time the government gave $300 to people on a permanent basis. «If you pay people not to work, they are not going to work,» Mulvaney said.
I need to follow up my recent article about tax, GDP, a free lunch and big governments. The Biden administration is calling for a tax hike and a much bigger government. Is the United States on the way to be a socialist country like France? If so, how would that be?
Let`s take a look at France. The biggest welfare state in the world. No other coutries in the world spend more money on welfare than the French government. No other coutries has higher taxes either.
But who is protesting a lot? No other countries in the world are protesting more than the people of France, and the yellow vest protesters showed us that. There were multiple reasons for all the protests in France. What they all had in common is that they were all dissatisfied.
Does the people of the United States really want to be a socialist state like France?
First of all; lets talk about tax. No other countries in the world have higher taxes than France. Personal income tax has dropped to 45%, down from 59,6% about twenty years ago. In other words; half of your hard earned money goes to the government.
Corporate tax rate in France dropped to 28% under president Macron. Do doubt that Macron is doing something right. A Trump strategy that is boosting the economy with lower taxes (but that was before the covid attack).
In the early 80`s, the corporate tax rate in France was at a record high with 50%. All that happened under President Fracois Mitterand who served as a President of France from 1981 to 1995, the longest time in office in the history of France.
Mitterand started political life on the Catholic nationalist right, but joined the resistance and moved to the left. He opposed Charles de Gaulle`s establishment of the Fifth Republic.
He invited the Communist Party into his first government, which was a controversial decision at the time. In the event, the Communists were boxed in as junior partners and, rather than taking advantage, saw their support erode. The left the cabinet in 1984.
Interestingly, right after that, the taxes started to decline. Mitterand followed a radical left-wing economic agenda, including nationalisation of key firms, but after two years, with the economy in crisis, he reversed course.
He pushed a socially liberal agenda with reforms such as the 39-hour week, and the end of a government monopoly in radio and television broadcasting.
His partnership with German Chancellor Hermut Kohl advanced European integration via the Maastricht Treaty, but he reluctantly accepted German reunification. By the way; he was also the only French President to ever have named a female Prime Minister; Edith Cresson.
Beyond making the French left electable, Mitterand presided over the rise of the Socialist Party to dominance of the left, and the decline of the once-mighty Communist Party (as a share of the popular vote in the first presidential round, the Communists shrank from a peak of 21,27% in 1969 to 8,66% in 1995, at the end of Mitterand`s second term).
As you can see, the popularity of the Communist Party declined from about 21% to 8%, but so did the corporate tax rate under Mitterand too.
But taxes need to come from someone, and that is the people. How is that going to work out if millions are unemployed? In France, the unemployment rate has always been high. It dropped to 8% in December of 2020, down from 9,1% in the previous period.
The number of unemployed people decreased by 340 thousand to 2,4 million. That sounds expensive. Someone has to pay for it.
France spend nearly one third of their GDP on social welfare, according to OECD. France are on top of the list (27,5) while the U.S is number 22 with 14,3% (as a percentage of GDP).
If we look at total net social spending, France is still at the top with 31,7%, but interestingly, the U:S is second with 30%. Total net social spending takes into account public and private social expenditure, and also includes the effect of direct taxes (income tax and social security contributions), indirect taxation of consumption on cash benefits, as well as tax breaks for social purposes.
Top 20 list of all the countries with tax revenue as a percent of GDP from 40% to 50% are all from Europe. except one; Cuba, at number 8 on the list. A communist country among all the European countries.
The debt in France is skyrocketing. Under Mitterand, the debt to GDP was about 20. Now, under Macron it has increased to 115,70 percent in 2020 from 97,60 percent in 2019.
At the same time, Government Budget in France decreased to -9,20 percent of GDP in 2020 from -3,10 percent in 2019. In other words; the government spends more money than it takes in from taxes and other fees.
So, socialist welfare state France has more debt than the United States. Devt to GDP in the U.S increased to 107,60 percent in 2020, up from 106,90 percent in 2019.
The unemployment rate is also lower in the U.S. The unemployment rate fell to 6 percent in March of 2021. The U.S government is also spending more money than they have. In 2019, the U.S recorded a government budget deficit equal to 4,60 percent of the GDP, but it`s expected to be about 13 percent in 2020.
On top of all the taxes, people in France also need to pay for the roads. A typical socialist country has toll roads. From Boreaux to Paris, you need to pay 55,60 euros for Classe A and 85,60 euros for Classe B.
All the money you earn from Janury to June goes to the government. The govenment will give the money you give them to sick people who ask for free healthcare. State healthcare insurance is available to everyone staying in France for more than three months.
The French Social Security system runs this insurance (called PUMA), and this insurance covers about 70% of the medical costs, and in some cases, even 100% of the costs. The state also pays for every child`s education from 6 to 16 years old.
So, if you pay nearly half of your hard earned money to your welfare state, and drive a car from Boreaux to Paris often, you have to ask yourself what your real tax actually is?
Let`s face it; Joe Biden is the most popular president in the United States ever. More popular than Barrack Obama. More popular than Bill Clinton. What people actually voted for is bigger government, more government spending and more taxes.
Biden is not talking much to the Media, but after 100 days, he held a speech, and that speech scared the hell out of many people in the United States. One of them is Lindsey Graham. Biden scared the hell out of me tonight, he said.
He look weak as a commandor in chief, and he embraced socialism, Graham said.
The Media Mob attacked Trump for his border policy, but only a few is talking about the border crisis they have now. Biden talked about problems like racism, guns, virus and money, but didn`t say much about the border crisis they`re facing now.
He attacked rich and wealthy people that created the wealth in the United States. He want them to pay more money, so the government can grow bigger. If Biden`s policy works, why are GDP per capita in the U.S better than socialist countries?
Wall Street Journal Editorial Board had this headline earlier this week; «Biden`s Cradle-to-Grave Government.» His latest $1,8 trillion plan rejects the old social contract of work for benefits. Something that have worked under Clinton, Bush and Obama. But now, it seems like it is a new era. A socialist era.
All the people behind Joe Biden assume that the people who voted for him love his tax hikes and bigger government. In November 2022, we will find out if they are right….
A once in a generation investment. That`s what president Biden called his $2 billion program of infrastructure spending. Biden said it will create millions of jobs while giving roads, utilities and American industry a badly needed upgrade.
But somebody have to pay for it, but who? «We the people» of course. The corporations. And there is one simple way to do that: TAX. Minimum wages are rising. So are the taxes, and what is that suppose to mean? It means the inflation is coming.
«I`m proposing a plan for the nation that rewards work. Not just rewares wealth. It builds a fair economy that gives everybody a chance to succeed. And it`s going to create the strongest, most resilient innovative economy in the world,» Biden said in a speech a few days ago.
The Biden administration plans on modernizing 32,000 kim of highway, 500,000 charging points for electric autos, and bringing back key industries such as chip production back to the U.S. Chips are still mostly produced in Asia. (Bringing back chip industries sounds like a Trump strategy).
The project is expected to take eight years to complete, and some of the funding will come from a corporate tax hike from 21 to 28 percent. Biden`s supporters say the program will create millions of well.paid jobs, and stregthen America`s ability to compete with China.
2 trillion dollars is a lot of money and there is no doubt that this program will boost the semiconductor industry, but also the EV industry.
Biden said he is not worried about the U.S economy at all. At the same time, Janet Yellen makes a push for global minimum corporate tax. She doesn`t want a race to the bottom, and warns of dangers to the American economy if U.S acts alone in raising corporate tax rates.
When Obama hiked corporate taxes, businesses fled. One of the largest corporations in the world; Apple, ended up in Irland thanks to a great offshore plan, but Trump were bringing the company back to the U.S.
It speaks for itself. The more money corporations pay in tax, the less competetive they are on the world stage.
The time we are living in today, is similar to the 30`s, and Biden`s infrastructure plan is often comparead to Franklin D. Roosevelt`s «New deal».
The New Deal was a series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1939.
The programs focused on what historians refer to as the «3 Rs»; relief for the unemployed and poor, recovery of the economy back to normal levels, and reform of the financial system to prevent a repeat depression ( the stock market crached in 1929).
The first deal (1933 – 1934) dealt with the pressing banking crisis through the Emergency Banking Act and the 1933 Banking Act. The Federal Emergency Relief Administration provided $500 million ($9,88 billion today) for relieft operations by states and cities, while the short-lived CWA gave locals money to operate Make-work projects in 1933 – 1934.
The Securities Act of 1933 was enacted to prevent a repeated stock market crash.
The second New Deal in 1935 – 1936 included the National Labor Relations Act to protect labor organizing, the Works Progress Administration relief program (which made the federal government the largest employer in the nation), the the Social Security Act and new programs to aid tenant farmers and migrant workers.
The final major items of New Deal legislation were the creation of the United States Housing Authority and the FSA, which both occurred in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers.
Keep in mind that all this happened a few years before the World War II occurred.
The economic downturn of 1937 – 1938 and the bitter split between the American Federation of Labor and Congress of Industrial Organizations labor unions led to major Republican gains in Congress in 1938.
Conservative Republicans and Democratas in Congress joined the informal conservative coalition. By 1942 – 1943, they shut down relief programs such as the WPA and the CCC and blocked major liberal proposals.
Nonetheless, Roosevelt turned his attention to the war effort and won reelection in 1940 – 1944. Furthermore, the Supreme Court declared the NRA and the first version of the Agricultural Adjustment Act unconstitutional, but the AAA was rewritten and then upheld.
Republican president Dwight.D. Eisenhower (1953 – 1961) left the New Deal largely intact, even expanding it in some areas. In the 1960`s, Lydon B. Johnson`s Great Society used the New Deal as inpiration for a dramatic expansion of liberal programs, which Republican Richard Nixon generally retained.
However, after 1974 the call for deregulation of the economy gained bipartisan support. The New Deal regulation of banking (Glass-Steagall Act) lasted until it was suspended in the 1990`s.
From 1929 to 1933 manufacturing output decreased by one third, which economist Milton Friedman called the Great Contraction. Prices fell by 20%, causing deflation that made repaying debts much harder.
Unemployment in the United States increased from 4% to 25%. additionally, one-third of all employed persons were downgraded to working part-time on much smaller paychecks. In the aggregate, almost 50% of the nation`s work-power was going unused.
Before the New Deal, deposits at banks were not insured. When thousands of banks closed, depositors lost their savings as at that time there was no national safety net, no public unemployment insurance and no Social Security.
The depression had devastated the nation. As Roosevelt took the oath of office at noon on March 4, 1933, all state governors had authorized bank holidays or restricted withdrawals. Many Americans had little or no access to their bank accounts.
Farm income had fallen by over 50% since 1929 (stock market crash). An estimated 844,000 non-farm mortgages had been foreclosed between 1930 – 1933, out of five million in all. Political and business leaders feared revolution and anarchy.
In 1935, Roosevelt called for a tax program called the Wealth Tax Act (Revenue Act of 1935) to redistribute wealth. The bill imposed an income tax of 79% on incomes over $5 million. It raised the bitterness of the rich who called Roosevelt «a traitor to his class» and the wealthy tax act a «soak the rich tax».
The Roosevelt administration was under assault during Roosevelt`s second term,which presided over a new dip in the Great Depression in the fall of 1937 that continued through most of 1938. Production and profits declined sharply.
Unemployment jumped from 14,3% in May of 1937 to 19% in June 1938. The downturn was perhaps due to nothing more than the familiar rhythms of the business cycle, but until 1937 Roosevelt had claimed responsibility for the excellent economic performance.
That backfired in the recession and the heated political atmosphere of 1937.
Keynes did not think that the New Deal under Roosevelt ended the Great Depression: «It is, it seems, politically impossible for a capitalistic democracy to organize expenditure on the scale necessary to make the grand experiments which would prove my case, except in war conditions.»
Worldwide, the Great Depression had the most profound impact in Germany and the United States. In both countries the pressure to reform and the perception of the economic crisis were strikingly similar.
When Hitler came to power he was faced with exactly the same task that faced Roosevelt, overcoming mass unemployment and the global Depression. The political responses to the crisis were essensially different; while American democracy remained strong, Germany replaced democracy with fascism, a Nazi dictatorship.
The initial perception of the New Deal was mixed. On the one hand, the eyes of the world were upon the United States because many American and European democrats saw in Roosevelt`s reform program a positive counterweight to the seductive powers of the two great alternative systems, communism and fascism.
As the historian Isaiah Berlin wrote in 1955: «The only light in the darkness was the administration of Mr. Roosevelt and the New Deal in the United States».
By contrast, enemies of the New Deal sometimes called it «fascist», but they meant very different things. Communists denounced the New Deal in 1933 and 1934 as fascist in the sence that it was under the control of big business. They deopped that line of thought when Stalin switched to the «Popular Front» plan of cooperation with liberals.