Current Events, Climate change
No president has divided public opinion more than Donald Trump. Many find him personally obnoxious, irresponsible and harmful to the U.S. and the world. His supporters however, see him as a breath of fresh air who is “making America great again”.
Personally, I am not an admirer of Trump but I think that it is beneficial to play the “devil’s advocate” and try to look at his record in his first two years in as positive light as possible. Continue reading “Trump’s Achievements”
Canada’s 2018 budget was released on February 26th. It projects an estimated deficit of $17.8 billion for 2018. In subsequent years the budget deficit is expected to decrease, but only to $13 billion.
Canada’s economy is currently strong. Unemployment is at record lows and GDP growth is as high as could be expected.
Conventional Keynesian economics would expect a budget surplus under these conditions. Admittedly the budget deficit is lower than had been expected a year ago due to the strong economy. This was seen as a signal for the Trudeau government to increase spending and introduce new programs.
Continue reading “Canada’s 2018 budget: virtue signaling all the way”
The tax reform bills which have recently been passed by the U.S. Senate and House of Representatives potentially introduced significant changes to U.S. tax law. This has been strongly pushed by Donald Trump. Here is a summary of the changes:
There is no doubt that the U.S. tax system needs reform. Although the corporate tax rate is 35%, in practice, the average tax rate actually paid by U.S. corporations is only 18.7% (by one estimate). The difference is due to all the deductions, exemptions and loopholes embedded in the tax code. Many of these are industry specific and are the result of years of successful lobbying by particular industries. As a result, the tax code introduces distortions in the economy which are not in the best interests of the country.
The tax reform has been sold as a needed stimulus for the economy, which will increase investment, hence increase productivity and lead to increased job creation
The reality is quite different:
I shall now expand on these in greater detail. Continue reading “U. S. Tax Reform – Wrong Policies, Wrong Reasons, Wrong Time”
There has been much discussion about raising the minimum wage, with proponents claiming it will improve the lives of the working poor and reduce “inequality” and opponents claiming it will reduce employment, making the poor worse off.
Classical economic theory claims that raising the minimum wage (or instituting it where there is none) will lower employment.
Closer examination suggests that a higher minimum wage will lead to increased inflation, some job losses, increased economic growth and reduced inequality. Continue reading “Can Raising the Minimum Wage Boost the Economy?”