Warm Southern Breeze

"… there is no such thing as nothing."

Trump Tax Cuts Aided & Abetted Economic Collapse

Posted by Warm Southern Breeze on Monday, April 20, 2020

The parallels are eerily similar. Republican POTUS, tax cuts, rising stock market, job losses… Great Depression.

Of course, there are other markers along the way, but the primary ones are self evident.

Jamie Dimon, Chairman and CEO of JPMorgan Chase wrote no less than twice that a recession was coming in the company’s April 6, 2020 letter to shareholders. “Recognizing the extraordinary extension of new credit, mentioned above, and knowing there will be a major recession [emphasis added] mean that we are exposing ourselves to billions of dollars of additional credit losses as we help both consumer and business customers through these difficult times.” p10
-and-
“Halting buybacks was simply a very prudent action – we don’t know exactly what the future will hold – but at a minimum, we assume that it will include a bad recession [emphasis added] combined with some kind of financial stress similar to the global financial crisis of 2008.” p15

Bluntly put, it wasn’t China that started this problem.

Just like in the Great Depression, and the “Great Recession,” it was the United States.

Jamie Dimon, Chairman and Chief Executive Officer, JPMorgan Chase

And the entire world suffered.

Not only did Dimon unequivocally state that we will suffer “a major recession,” and reiterated it writing “the future… will include a bad recession,” but he also identifies problems that most Democrats (Bernie Sanders notably among them) have long identified, which Republicans refuse to even hear – critical problems in health, healthcare, education, (within the purview of domestic security), infrastructure, declining wages, increased poverty, failed immigration policies, governmental inefficiency at Federal and state levels, and more.

Dimon continued by writing,

“Of course, America has always had its flaws. The current pandemic is only one example of the bad planning and management that have hurt our country: Our inner city schools don’t graduate half of their students and don’t give our children an education that leads to a livelihood; our healthcare system is increasingly costly with many of our citizens lacking any access; and nutrition and personal health aren’t even being taught at many schools. Obesity has become a national scourge. We have a litigation and regulatory system that cripples small businesses with red tape and bureaucracy; ineffective infrastructure planning and investment; and huge waste and inefficiency at both the state and federal levels. We have failed to put proper immigration policies in place; our social safety nets are poorly designed; and the share of wages for the bottom 30% of Americans has effectively been going down. We need to acknowledge these problems and the damage they have done if we are ever going to fix them.

There should have been a pandemic playbook. Likewise, every problem I noted above should have detailed and nonpartisan solutions. As we have seen in past crises of this magnitude, there will come a time when we will look back and it will be clear how we – at all levels of society, government, business, healthcare systems, and civic and humanitarian organizations – could have been and will be better prepared to face emergencies of this scale. While the inclination of some will be to finger-point and look for blame, I hope we can avoid that. I also hope we can avoid people using times of crisis to argue for what they already believe. We need to demand more of ourselves and our leaders if we want to prevent or mitigate these disasters. This can be a moment when we all come together and recognize our shared responsibility, acting in a way that reflects the best of all of us. As President Kennedy historically said, “Ask not what your country can do for you – ask what you can do for your country.”

“My fervent hope is that America rolls up its sleeves and starts to attack these problems. Fixing them would better prepare us for future catastrophes, create better economic outcomes for everyone (with policies that aim to maximize economic growth, driving the best potential outcomes), improve income inequality, protect the most vulnerable and foster economic growth that is more resilient, which would also strengthen America’s role in the world. We must never forget that America’s economic prosperity is a necessary foundation for our military capability, which keeps us free and strong and is essential to world peace. These issues could all be tackled while preserving the freedoms ascribed by our Founding Fathers: life, liberty and the pursuit of happiness, freedom of speech, freedom of religion and freedom of enterprise, which means the free movement of capital and labor (meaning you can work where you want and for whom you want). At the end of the day, the pursuit of happiness, our freedoms and free enterprise are inseparable.”

Even the oft-maligned (by Trump) Central Intelligence Agency is keenly aware of American shortcomings.

“In December 2017, Congress passed and President Donald TRUMP signed the Tax Cuts and Jobs Act, which, among its various provisions, reduces the corporate tax rate from 35% to 21%; lowers the individual tax rate for those with the highest incomes from 39.6% to 37% [emphasis added], and by lesser percentages for those at lower income levels; changes many deductions and credits used to calculate taxable income; and eliminates in 2019 the penalty imposed on taxpayers who do not obtain the minimum amount of health insurance required under the ACA. The new taxes took effect on 1 January 2018; the tax cut for corporations are permanent, but those for individuals are scheduled to expire after 2025 [emphasis added]. The Joint Committee on Taxation (JCT) under the Congressional Budget Office estimates that the new law will reduce tax revenues and increase the federal deficit by about $1.45 trillion over the 2018-2027 period. [emphasis added] This amount would decline if economic growth were to exceed the JCT’s estimate.”
Source: CIA World Factbook

Gross Domestic Product
$19.49 trillion
(2017 est.)
$19.06 trillion (2016 est.)
$18.77 trillion (2015 est.)
note: data are in 2017 dollars
Country comparison to the world: 2
GDP (purchasing power parity) compares the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States.

The TOP 60 of 228 nations GDP purchasing power parity (top 26%)

Rank Country GDP (purchasing power parity) Date of Information
1 China $25,360,000,000,000 2018
2 United States $19,490,000,000,000 2017 est.
3 India $9,474,000,000,000 2017 est.
4 Japan $5,443,000,000,000 2017 est.
5 Germany $4,199,000,000,000 2017 est.
6 Russia $4,016,000,000,000 2017 est.
7 Indonesia $3,250,000,000,000 2017 est.
8 Brazil $3,248,000,000,000 2017 est.
9 United Kingdom $2,925,000,000,000 2017 est.
10 France $2,856,000,000,000 2017 est.
11 Mexico $2,463,000,000,000 2017 est.
12 Italy $2,317,000,000,000 2017 est.
13 Turkey $2,186,000,000,000 2017 est.
14 Korea, South $2,035,000,000,000 2017 est.
15 Spain $1,778,000,000,000 2017 est.
16 Saudi Arabia $1,775,000,000,000 2017 est.
17 Canada $1,774,000,000,000 2017 est.
18 Iran $1,640,000,000,000 2017 est.
19 Australia $1,248,000,000,000 2017 est.
20 Thailand $1,236,000,000,000 2017 est.
21 Egypt $1,204,000,000,000 2017 est.
22 Taiwan $1,189,000,000,000 2017 est.
23 Poland $1,126,000,000,000 2017 est.
24 Nigeria $1,121,000,000,000 2017 est.
25 Pakistan $1,061,000,000,000 2017 est.
26 Malaysia $933,300,000,000 2017 est.
27 Netherlands $924,400,000,000 2017 est.
28 Argentina $922,100,000,000 2017 est.
29 Philippines $877,200,000,000 2017 est.
30 South Africa $767,200,000,000 2017 est.
31 Colombia $711,600,000,000 2017 est.
32 United Arab Emirates $696,000,000,000 2017 est.
33 Bangladesh $690,300,000,000 2017 est.
34 Iraq $649,300,000,000 2017 est.
35 Vietnam $648,700,000,000 2017 est.
36 Algeria $630,000,000,000 2017 est.
37 Belgium $529,200,000,000 2017 est.
38 Singapore $528,100,000,000 2017 est.
39 Switzerland $523,100,000,000 2017 est.
40 Sweden $518,000,000,000 2017 est.
41 Romania $483,400,000,000 2017 est.
42 Hong Kong $480,500,000,000 2018
43 Kazakhstan $478,600,000,000 2017 est.
44 Chile $452,100,000,000 2017 est.
45 Austria $441,000,000,000 2017 est.
46 Peru $430,300,000,000 2017 est.
47 Venezuela $381,600,000,000 2017 est.
48 Norway $381,200,000,000 2017 est.
49 Czechia $375,900,000,000 2017 est.
50 Ukraine $369,600,000,000 2017 est.
51 Ireland $353,300,000,000 2017 est.
52 Qatar $339,500,000,000 2017 est.
53 Burma $329,800,000,000 2017 est.
54 Israel $317,100,000,000 2017 est.
55 Portugal $314,100,000,000 2017 est.
56 Greece $299,300,000,000 2017 est.
57 Morocco $298,600,000,000 2017 est.
58 Kuwait $289,700,000,000 2017 est.
59 Hungary $289,600,000,000 2017 est.
60 Denmark $287,800,000,000 2017 est.

Gross Domestic Product growth rate
2.3% (2019 est.)
2.9% (2018 est.)
2.2%
(2017 est.)

1.6% (2016 est.)
2.9% (2015 est.)
GDP per capita
$59,800 (2017 est.)
$58,900 (2016 est.)
$58,400 (2015 est.)
note: data are in 2017 dollars
Country ranking comparison to the world: 19
For comparison purposes, here are the rankings of
The TOP 60 of 228 nations GDP per capita (top 26%)
Rank Country GDP – per capita (PPP) Date of Information
1 Liechtenstein $139,100 2009 est.
2 Qatar $124,100 2017 est.
3 Macau $122,000 2018
4 Monaco $115,700 2015 est.
5 Luxembourg $105,100 2017 est.
6 Bermuda $99,400 2016 est.
7 Singapore $94,100 2017 est.
8 Isle of Man $84,600 2014 est.
9 Brunei $78,900 2017 est.
10 Ireland $73,200 2017 est.
11 Norway $72,100 2017 est.
12 Falkland Islands (Islas Malvinas) $70,800 2015 est.
13 United Arab Emirates $68,600 2017 est.
14 Sint Maarten $66,800 2014 est.
15 Kuwait $65,800 2017 est.
16 Hong Kong $64,500 2018
17 Switzerland $62,100 2017 est.
18 Gibraltar $61,700 2014 est.
19 United States $59,800 2017 est.
20 San Marino $59,000 2017 est.
21 Jersey $56,600 2016 est.
22 Saudi Arabia $54,500 2017 est.
23 Netherlands $53,900 2017 est.
24 Guernsey $52,500 2014 est.
25 Iceland $52,200 2017 est.
26 Sweden $51,200 2017 est.
27 Germany $50,800 2017 est.
28 Taiwan $50,500 2017 est.
29 Australia $50,400 2017 est.
30 Denmark $50,100 2017 est.
31 Austria $50,000 2017 est.
32 Andorra $49,900 2015 est.
33 Bahrain $49,000 2017 est.
34 Canada $48,400 2017 est.
35 Belgium $46,600 2017 est.
36 Saint Pierre and Miquelon $46,200 2006 est.
37 Oman $46,000 2017 est.
38 Finland $44,500 2017 est.
39 United Kingdom $44,300 2017 est.
40 France $44,100 2017 est.
41 Cayman Islands $43,800 2004 est.
42 Japan $42,900 2017 est.
43 Malta $41,900 2017 est.
44 Greenland $41,800 2015 est.
45 Faroe Islands $40,000 2014 est.
46 Korea, South $39,500 2017 est.
47 Puerto Rico $39,400 2017 est.
48 New Zealand $39,000 2017 est.
49 Spain $38,400 2017 est.
50 Italy $38,200 2017 est.
51 Aruba $37,500 2017 est.
52 Equatorial Guinea $37,400 2017 est.
53 Cyprus $37,200 2017 est.
54 Virgin Islands $37,000 2016 est.
55 Israel $36,400 2017 est.
56 Guam $35,600 2016 est.
57 Czechia $35,500 2017 est.
58 Slovenia $34,500 2017 est.
59 British Virgin Islands $34,200 2017 est.
60 Montserrat $34,000 2011 est.
For comparative purposes, here’s a year-by-year GDP timeline annotated with historical events for context.

U.S. GDP Annually Since 1929 with Major Events

Nominal and real GDP from 1929 to 2019. ¹ ² ³
Historical events and government policies added for context.

Year Nominal GDP (trillions) Real GDP (trillions) GDP Growth Rate Events Affecting GDP
1929 $0.105 $1.109 NA Great Depression began
1930 $0.092 $1.015 -8.5% Smoot-Hawley
1931 $0.077 $0.950 -6.4% Dust Bowl
1932 $0.060 $0.828 -12.9% Hoover tax hikes
1933 $0.057 $0.817 -1.2% FDR inaugurated, New Deal
1934 $0.067 $0.906 10.8% U.S. debt rose
1935 $0.074 $0.986 8.9% Social Security
1936 $0.085 $1.113 12.9% FDR tax hikes
1937 $0.093 $1.170 5.1% Depression returned
1938 $0.087 $1.132 -3.3% Great Depression ended
1939 $0.093 $1.222 8.0% WWII, Dust Bowl ended
1940 $0.103 $1.330 8.8% Defense increased
1941 $0.129 $1.566 17.7% Pearl Harbor
1942 $0.166 $1.862 18.9%
1943 $0.203 $2.178 17.0% Defense spending tripled
1944 $0.224 $2.352 8.0% Bretton Woods Agreement
1945 $0.228 $2.329 -1.0% Truman inaugurated, WWII ended, recession
1946 $0.228 $2.058 -11.6% Truman budget cuts
1947 $0.250 $2.035 -1.1% Cold War began
1948 $0.275 $2.119 4.1% Recession
1949 $0.273 $2.107 -0.6% NATO, Fair Deal
1950 $0.300 $2.290 8.7% Korean War
1951 $0.347 $2.474 8.0%
1952 $0.367 $2.575 4.1%
1953 $0.389 $2.696 4.7% Eisenhower inaugurated, Korean War end, recession
1954 $0.391 $2.680 -0.6% Dow returned to 1929 high
1955 $0.426 $2.871 7.1%
1956 $0.449  $2.932 2.1%
1957 $0.474 $2.994 2.1% Eisenhower re-elected, Recession
1958 $0.481 $2.972 -0.7% Recession ended
1959 $0.522 $3.178 6.9% Fed raised rates
1960 $0.542 $3.260 2.6% Recession
1961 $0.562 $3.344 2.6% JFK elected, ended recession
1962 $0.604 $3.548 6.1%
1963 $0.638 $3.703 4.4% JFK assassinated, LBJ inaugurated
1964 $0.685 $3.916 5.8% LBJ’s Medicare, Medicaid
1965 $0.742 $4.171 6.5%
1966 $0.813 $4.446 6.6% Vietnam War
1967 $0.860 $4.568 2.7%
1968 $0.941 $4.792 4.9% Moon landing
1969 $1.018 $4.942 3.1% Nixon inaugurated
1970 $1.073 $4.951 0.2% Recession
1971 $1.165 $5.114 3.3% Wage-price controls
1972 $1.279 $5.383 5.3% Stagflation
1973 $1.425 $5.687 5.6% Nixon ends gold standard
1974 $1.545 $5.657 -0.5% Watergate, Nixon resigned, Ford inaugurated
1975 $1.685 $5.645 -0.2% Recession ended
1976 $1.873 $5.949 5.4% Fed lowered rates
1977 $2.082 $6.224 4.6% Carter inaugurated
1978 $2.352 $6.569 5.5% Fed 20% rate hike ended inflation
1979 $2.627 $6.777 3.2% Recession
1980 $2.857 $6.759 -0.3%
1981 $3.207 $6.931 2.5% Reagan inaugurated, tax cuts
1982 $3.344 $6.806 -1.8% Recession ended
1983 $3.634 $7.118 4.6% Tax hike and defense spending
1984 $4.038 $7.633 7.2%
1985 $4.339 $7.951 4.2%
1986 $4.580 $8.226 3.5% Tax cut
1987 $4.855 $8.511 3.5% Black Monday
1988 $5.236 $8.867 4.2% Fed raised rates
1989 $5.642 $9.192 3.7% George HW Bush inaugurated, S&L Crisis
1990 $5.963 $9.366 1.9% Recession
1991 $6.158 $9.355 -0.1%
1992 $6.520 $9.685 3.5% NAFTA drafted
1993 $6.859 $9.952 2.8% Clinton inaugurated, Balanced Budget Act
1994 $7.287 $10.352 4.0%
1995 $7.640 $10.630 2.7% Fed raised rates
1996 $8.073 $11.031 3.8% Welfare reform
1997 $8.578 $11.522 4.4%
1998 $9.063 $12.038 4.5% LTCM crisis
1999 $9.631 $12.611 4.8% Glass-Steagall repealed
2000 $10.252 $13.131 4.1% Tech bubble burst
2001 $10.582 $13.262 1.0% Bush inaugurated, 9/11 attacks
2002 $10.936 $13.493 1.7% War on Terror
2003 $11.458 $13.879 2.9% Iraq War, JGTRRA
2004 $12.214 $14.406 3.8%
2005 $13.037 $14.913 3.5% Katrina, Bankruptcy Act
2006 $13.815 $15.338 2.9% Fed raised rates
2007 $14.452 $15.626 1.9% Bank crisis
2008 $14.713 $15.605 -0.1% Financial Crisis
2009 $14.449 $15.209 -2.5% Obama inaugurated, Stimulus Act
2010 $14.992 $15.599 2.6% PPACA, Dodd-Frank
2011 $15.543 $15.841 1.6% Japan earthquake
2012 $16.197 $16.197 2.2% Fiscal cliff
2013 $16.785 $16.495 1.8% Sequestration
2014 $17.527 $16.912 2.5% QE ends
2015 $18.225 $17.404 2.9% TPP, Iran deal
2016 $18.715 $17.689 1.6% Presidential race
2017 $19.519 $18.108 2.4% Trump inaugurated, Trump Tax Act
2018 $20.580 $18.638 2.9% Deficit spending
2019 $21,429 $19,073 2.3% Trade war

¹ Bureau of Economic Analysis. “National Income and Product Accounts Tables: Table 1.1.5. Gross Domestic Product.”
² Bureau of Economic Analysis. “National Income and Product Accounts Tables: Table 1.1.3. Real Gross Domestic Product.”
³ Bureau of Economic Analysis. “National Income and Product Accounts Tables: Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product.”

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