For the USA, I would be rooting for a DOGE 2.0 combined with a corporate tax cut, say 15%. On another note, bring the endowments back into the taxable world: the same 15%.
Forcing government to save money is a multi-year or multi-decade effort: you need to tell them 50 times and FORCE them to swallow it. See: Reagan, Thatcher.
The predominantly socialist Belgian government overspent badly in the 1970ies. It took successive governments 2 decades to bring the situation into a balance. Wilfried Martens and Jean-Luc Dehaene, two successive prime ministers, both Flemish christian democrats (CVP), delivered it. Martens called it a tunnel: you go into the tunnel today and may see some light in 10 years or so. The first evidence we saw is that the then Belgian Frank started to revaluate with the Deutsche Mark rather than devaluate with the French Franc (its previous course). Also the trade deficit turned into a trade surplus.
Sometimes you just need to cut taxes ahead, paradoxically making the deficit BIGGER, to force parliaments to act with focus on true, hard cuts. Otherwise they will make the deficit bigger too, but by spending on pet projects and social & state spending. You have to put them in a situation where there is just no wiggle room left whatsoever for more spending. Put parliament out with their naked butt on the cold wet grass.
In the meantime, the economy will grow on the back of the tax cuts. You end up with a smaller and effective public/state economy and a bigger and healthier and more productive private/corporate economy once you come out of the tunnel.
Most economists disagree with what I write above; however not a single one of them has found a better approach. The one I sketch above has worked in practice, and I have never seen another approach work. As I said, it takes one or two decades.
The problem with standard economics is that it fails to grasp the political dimension, which overwhelms the economic rationale in practice.
I can’t remember where I read this, but I do recall someone saying much of the great success of Clinton’s economy stemmed from Bush Sr. It makes sense.
I feel like that is where Trumps mindset is, long term, legacy. I know he is rough around the edges, and I cringe at his comments sometimes. But I feel he really does care about the country. The TDS is so out of control.
I think how he handled Butler last year truly is one of the greatest presidential (as he would say) moments in history… he insisted on getting his shoes and acknowledging the crowd with a pumped fist…
Two different characters, but two people who succeeded on the back of their unique personality, and innovated where a lifetime politician would not have done so.
Brilliant this one John. Plenty must envy the capitalist freedom Milei now enjoys. His eccentricity certainly helps and, as you say, he’s not short on confidence.
Let’s hope the Crown’s crockery doesn’t have to shatter here before real change can happen. We can’t tax our way out of a hole if we’re not growing.
The other example that comes to mind is Ludwig Erhard (economics minister of Konrad Adenauer) who scrapped price controls in the West-German occupied economy overnight, without consultation with the occupation forces.
Lucius Clay, commander of the US & Allied Forces called Erhard in to the old IG Farben building in Frankfurt (then head office of the US army and now the Goethe Universitaet) and reprimanded Erhard that he did not have the power to make changes to the price controls.
To which Erhard answered: "Ich habe die nicht geaendert, ich habe die gestrichen" (I did not change the price controls, I scrapped them).
Putin has no interest for the time being of settling: the demolition work goes on and is for now progressing well enough for Putin to continue course. The Russian economy shows no weaknesses (or rather, no more than usual). I think the 19th set of measures by the EU will achieve little.
We will discuss but I generally agree here; though stasis on the battlefield might make an end of year deal work for him in realist terms. But he’s going to have a crack at 1918….
For the USA, I would be rooting for a DOGE 2.0 combined with a corporate tax cut, say 15%. On another note, bring the endowments back into the taxable world: the same 15%.
Did any of the DOGE 1.0 actually get enforced?
Yes.
USAID made significant savings.
Forcing government to save money is a multi-year or multi-decade effort: you need to tell them 50 times and FORCE them to swallow it. See: Reagan, Thatcher.
The predominantly socialist Belgian government overspent badly in the 1970ies. It took successive governments 2 decades to bring the situation into a balance. Wilfried Martens and Jean-Luc Dehaene, two successive prime ministers, both Flemish christian democrats (CVP), delivered it. Martens called it a tunnel: you go into the tunnel today and may see some light in 10 years or so. The first evidence we saw is that the then Belgian Frank started to revaluate with the Deutsche Mark rather than devaluate with the French Franc (its previous course). Also the trade deficit turned into a trade surplus.
Sometimes you just need to cut taxes ahead, paradoxically making the deficit BIGGER, to force parliaments to act with focus on true, hard cuts. Otherwise they will make the deficit bigger too, but by spending on pet projects and social & state spending. You have to put them in a situation where there is just no wiggle room left whatsoever for more spending. Put parliament out with their naked butt on the cold wet grass.
In the meantime, the economy will grow on the back of the tax cuts. You end up with a smaller and effective public/state economy and a bigger and healthier and more productive private/corporate economy once you come out of the tunnel.
Most economists disagree with what I write above; however not a single one of them has found a better approach. The one I sketch above has worked in practice, and I have never seen another approach work. As I said, it takes one or two decades.
The problem with standard economics is that it fails to grasp the political dimension, which overwhelms the economic rationale in practice.
I can’t remember where I read this, but I do recall someone saying much of the great success of Clinton’s economy stemmed from Bush Sr. It makes sense.
I feel like that is where Trumps mindset is, long term, legacy. I know he is rough around the edges, and I cringe at his comments sometimes. But I feel he really does care about the country. The TDS is so out of control.
I think how he handled Butler last year truly is one of the greatest presidential (as he would say) moments in history… he insisted on getting his shoes and acknowledging the crowd with a pumped fist…
I want to read the new book Butler
Thanks Erik!
Reminds me most of Reagan.
Two different characters, but two people who succeeded on the back of their unique personality, and innovated where a lifetime politician would not have done so.
Meanwhile, in Europe, no sightings of a Margaret Thatcher so far.
Brilliant this one John. Plenty must envy the capitalist freedom Milei now enjoys. His eccentricity certainly helps and, as you say, he’s not short on confidence.
Let’s hope the Crown’s crockery doesn’t have to shatter here before real change can happen. We can’t tax our way out of a hole if we’re not growing.
The other example that comes to mind is Ludwig Erhard (economics minister of Konrad Adenauer) who scrapped price controls in the West-German occupied economy overnight, without consultation with the occupation forces.
Lucius Clay, commander of the US & Allied Forces called Erhard in to the old IG Farben building in Frankfurt (then head office of the US army and now the Goethe Universitaet) and reprimanded Erhard that he did not have the power to make changes to the price controls.
To which Erhard answered: "Ich habe die nicht geaendert, ich habe die gestrichen" (I did not change the price controls, I scrapped them).
Ukraine settlement this year is the most at risk.
Putin has no interest for the time being of settling: the demolition work goes on and is for now progressing well enough for Putin to continue course. The Russian economy shows no weaknesses (or rather, no more than usual). I think the 19th set of measures by the EU will achieve little.
We will discuss but I generally agree here; though stasis on the battlefield might make an end of year deal work for him in realist terms. But he’s going to have a crack at 1918….