The stimulus bill

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During a town hall with CEOs on Tuesday, President Donald Trump took a swipe at former President Barack Obama’s stimulus bill ― aka the American Recovery Act ― by claiming that the 2009 law was a trillion-dollar dud. “Nobody ever saw anything being built,” Trump said. “I mean, to this day, I haven’t heard of anything that’s been built. They used most of that money on social programs, and we want this to be on infrastructure.”

This is a false portrayal of the Recovery Act ― not just because its cost came in under $1 trillion, a third of which were in tax cuts, but because Trump has almost certainly seen plenty of things built with stimulus money. If he hasn’t, he doesn’t need to travel far. Projects built with stimulus funds, and businesses that benefited from the law’s passage, surround his current home and the properties he likes to frequent on the weekends. Take, for example, Pennsylvania Avenue in Washington, D.C., the very street where Trump now lives and where the Trump International Hotel stands.

There was nearly $20 million spent on “streetscape construction” to improve 6.5 lane miles of Pennsylvania Ave., according to funds tracked in ProPublica’s database. Or consider the site of Trump’s pre-inaugural event: a concert in front of the Lincoln Memorial Reflecting Pool, which was rehabilitated with stimulus money. To get to the White House, the Trump International Hotel, or the Lincoln Memorial, one might consider taking public transportation. That, too, was a beneficiary of the stimulus. The Washington Metropolitan Area Transit Authority got $184 million in funds to purchase hybrid buses and paratransit vans, among other things.

Donald Trump, Who Denies The Impact Of The Obama Stimulus, Is Surrounded By It | The Huffington Post

“Well, sometimes you have to prime the pump,” Donald Trump told Time magazine, explaining blithely how he plans to brush aside years of conservative anti-Keynesian rhetoric. The hypocrisy here is truly stunning, though in a sense conservatives have consistently (since the Reagan Era) adhered to the view that big deficits are good if and only if there’s a Republican in the White House.

Donald Trump’s fiscal stimulus probably won’t work - Vox

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On the Ryan budget, which is a variation of most conservative budget proposals, tax cuts mainly for the rich in exchange for cutting in social programs:

If you leave out the magic asterisks — closing of unspecified tax loopholes — that budget was a deficit-hiker: $5.7 trillion in tax cuts over 10 years, versus $5 trillion in spending cuts. The spending cuts involved cuts in discretionary spending plus huge cuts in programs that serve the poor and middle class; the tax cuts were, of course, very targeted on high incomes.

The pluses and minuses here would have quite different effects on demand. Cutting taxes on high incomes probably has a low multiplier: the wealthy are unlikely to be cash-constrained, and will save a large part of their windfall.

Cutting discretionary spending has a large multiplier, because it directly cuts government purchases of goods and services; cutting programs for the poor probably has a pretty high multiplier too, because it reduces the income of many people who are living more or less hand to mouth. Taking all this into account, that old Ryan plan would almost surely have been contractionary, not expansionary.

Economics and Politics by Paul Krugman - The Conscience of a Liberal - The New York Times