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Posts tagged ‘GDP’

Reporter uses top Biden adviser’s own words to undercut attempt to redefine recession: ‘What changed?’

By CHRIS ENLOE | July 28, 2022


The White House was confronted Wednesday over previous comments a top Biden administration adviser made that contradicts the administration’s narrative on “recession.”

On Thursday, the Bureau of Economic Analysis announced the U.S. economy shrank 0.9% in the second quarter of 2022, thus meeting the standard definition of recession, which is two consecutive quarters of GDP contraction. The National Bureau of Economic Research, however, has not officially declared a recession.

In anticipation of the BEA’s report, the White House has been downplaying the accepted definition of recession. According to White House officials, two consecutive quarters of negative GDP growth is not the “technical” definition. Brian Deese, director of the National Economic Council, strongly reiterated this claim during the White House press briefing on Tuesday.

“Two negative quarters of GDP growth is not the technical definition of recession. It’s not the definition that economists have traditionally relied on,” Deese said. “There is an organization called the National Bureau of Economic Research, and what they do is they look at a broad range of data in deciding whether or not a recession has occurred.”

In 2008, when he worked for Hillary Clinton’s presidential campaign, Deese said the “technical” definition of recession is, in fact, two consecutive quarters of GDP contraction.

“What Senator Clinton has said is that of course economists have a technical definition of recession, which is two consecutive quarters of negative growth,” Deese said in March 2008.

The comments were made as then-President George W. Bush tried to alleviate recessionary fears. At the time and as Deese’s comment reflect, Democrats seized on the moment to emphasize the unfortunate economic circumstances to help Democrats in the 2008 presidential election.

Fox News correspondent Peter Doocy asked White House press secretary Karine Jean-Pierre about the glaring contradiction on Wednesday, asking why the White House wants to “redefine” the word “recession” while at the same time downplaying the inflation crisis.

“If things are going so great, though, then why is it that White House officials are trying to redefine ‘recession?'” Doocy asked.

When Jean-Pierre claimed the White House is not redefining recession, Doocy pulled out Deese’s 2008 remarks.

“What changed?” Doocy asked. “What’s the difference other than who the president is?”

Jean-Pierre, however, did not directly respond to the question, instead reiterating the Biden administration’s recession narrative.

WSJ: The Tax Cuts Will Grow the Economy by Much More than Expected

Mark Wilson/Getty Images

Reported by John Carney | 18 Dec 2017

URL of the original posting site:

Tax cuts are going to grow the economy by much more than expected.

That’s the verdict of the Wall Street Journal‘s prestigious “Heard on the Street” column. Importantly, Heard on the Street is run by the news side of the WSJ, not its tax-cut loving editorial page. So there’s no particular pro-tax cut or pro-Republican bias at work here.

Justin Lahart of Heard writes:

There were several surprises for investors when Republicans unveiled their final tax bill Friday, but the most significant is that they add up to a bigger boost to economic growth next year.

The bigger stimulus could fundamentally change how the market behaves in 2018. Sales and profits will be stronger than most investors expect. But with the unemployment rate low, wage pressures will mount faster, and inflation should pick up more. If the tax plan passes, as seems likely, it could lead the Federal Reserve to raise rates faster, putting the bond market at risk.

The tax plan was always expected to juice the economy, but the Senate version, which passed after the House approved its bill, had relatively modest short-term stimulus. While the stock market kept rising in anticipation of a cut, the bond market hardly budged. The bill unveiled Friday front-loaded more than $200 billion in stimulus for next year. Economists had been penciling in a boost of about a third of a percentage point next year. Now that is looking way low.

Some of the pro-growth changes include eliminating any delay to the corporate tax cuts, lowering of the top individual rate, lowering rates for most taxpayers, and increasing the child tax credit. The latter is particularly important because middle-class households are “more likely to spend extra income than the rich.”

The tax bill could increase GDP by 1.3 percent, Lahart writes.

That’s an additional full percentage point gain from what economists had been expecting based on earlier bills.

(Full disclosure: I used to work for Heard on the Street and consider Lahart a personal friend. He’s had me over to his apartment for fish.)

Treasury Secretary: $18T Debt Is Not ‘The Most Pressing Concern Today’

waving flagBy Susan Jones | June 18, 2015

U.S. Treasury Secretary Jacob Lew chairs the Financial Stability Oversight Council, which grew out of the 2010 Dodd-Frank law. (AP File Photo)

( – How can you talk about vulnerabilities in the U.S. financial system without mentioning the $18-trillion-and-growing U.S. debt, Rep. Blaine Luetkemeyer (R-Mo.) asked Treasury Secretary Jacob Lew on Wednesday. “I don’t think it is the most pressing concern today because we have controlled the rate of growth,” Lew told the House Financial Services Committee.

“I don’t think right now that debt 20, 30 years from now is the thing that’s holding our economy back,” Lew told the hearing focusing on the annual report of the Financial Stability Oversight Council (FSOC).

Lew chairs the FSOC, a body formed in 2010 to respond to emerging risks to the U.S. financial system. “I think if you look at the risks to our economy from federal spending and debt, we are in a much better position now than we were six and a half years ago,” Lew told Luetkemeyer. Lew later noted that “debt as a percentage of GDP has stabilized for this period of time. We have made enormous progress, it was climbing, and it has stabilized.”

Luetkemeyer pointed to a June 16 Congressional Budget Office report that warns: “If current laws remained generally unchanged, federal debt held by the public would exceed 100 percent of GDP by 2040 and continue on an upward path relative to the size of the economy — a trend that could not be sustained indefinitely.”Spiraling

But Lew said that CBO report “makes clear that over the next ten years, we’re in a pretty stable place.”

The report projects that under current law, federal debt held by the public would decline slightly relative to GDP over the next few years…After that, however, growing budget deficits — caused mainly by the aging of the population and rising health care costs — would push debt back to, and then above, its current high level. The deficit would grow from less than 3 percent of GDP this year to more than 6 percent in 2040. At that point, 25 years from now, federal debt held by the public would exceed 100 percent of GDP.”

Lew told Congress, “I think the thing in that report that people are concerned about is the long-term. And obviously there are still long-term issues.” … I think if you look at where we were, where we were in 2008, 2009, we were careening towards a very treacherous place. We’ve stabilized it and it’s improving. We still have long-term challenges and–“

Luetkemeer interrupted, telling Lew, “The point I’m trying to make is, CBO points out the debt is a problem for our economy, and yet your report does nothing, says nothing about it, and you are supposed to be an agency that points out these problems. Why is — my question is, why did you not point out that debt is a problem for our economy?”

“I — our report appropriately looks at the threats to financial stability,” Lew responded.

“So you don’t consider it a threat?” the congressman asked.

“I think that if you look at what we have — where we are today versus six years ago, the federal deficit has been brought under control for the next decade. We are in…a period where we need to get the economy growing. I totally agree with you, our conversation should be about what can we do to grow the economy,” Lew continued. “And we know there are things we could do. We could have an infrastructure program in place. We could have immigration reform. There’s lots of things we could do to grow our economy. I don’t think right now that debt 20, 30 years from now is the thing that’s holding our economy back.”

Luetkemeyer said he thinks Lew has “missed the boat…We’ve dropped the ball on this.”DO NOT JACKASS

Rep. Robert Pittenger (R-N.C.) asked Lew several times if he sees the debt as a threat: “Is it a vital concern to you today?”

“I don’t think it is the most pressing concern today because we have controlled the rate of growth,” Lew replied.

“So $18 trillion, that’s not a concern?” Pittenger followed up.

“As a percentage of GDP, we’ve stabilized the deficit and the growth of the debt,” Lew said. “In the next ten  years, we have a stable debt and deficit situtation.”

Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, noted that the national debt is $18 trillion and counting. He called it “perhaps one of the greatest existential threats that we face,” and he noted that more debt has been incurred under President Obama than in the nation’s first 200 years.Cloward Pevin with explanation

“This is beyond negligent, it is beyond egregious. It is dangerous and, frankly, it is offensive,” Hensarling said.

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