With Budget Deal, the G.O.P. Tosses Out the Economics Textbooks

the Pentagon, which has spent years complaining about spending restraints that were introduced in 2011, will get an eighty-billion-dollar increase in its budget for this year, and an extra eighty-five billion dollars for next year.

.. All told, the deal authorizes about three hundred billion dollars in new spending over the next two years.

.. Gross domestic product .. is currently about twenty trillion dollars

.. the G.O.P. tax bill will reduce tax payments by about a hundred and thirty-five billion dollars in the 2018 fiscal year, and by two hundred and eighty billion dollars in the 2019 fiscal year.

.. If you add it to the additional spending in the budget deal, you’ve got a pretty big “Trump stimulus.”

.. the over-all effect of the tax bill and the spending deal would be about 1.25 per cent of G.D.P. for this calendar year, and two per cent for the next.

.. the Obama stimulus of 2009 through 2011 .. totalled about two per cent of G.D.P. each year

.. Many economics textbooks say this is the sort of environment in which the government should be balancing its books, and perhaps even paying down deb

.. in 2011 prompted members of the Party to refuse to raise the debt ceiling, is purely cynical.

.. The Reagan Administration and the George W. Bush Administration both raided the public purse to finance big tax cuts, and left the deficit much higher than they found it. The Trump Administration is merely following suit.

.. “As long as there is still slack in corners of the labor market, then this kind of fiscal stimulus of the economy near full employment is a kind of test I support.”