Was the economy better under Trump? | Debate: Ben Shapiro vs Destiny - Lex Fridman Podcast

Summary

The transcript discusses the legislative accomplishments and fiscal policies of US Presidents Biden and Trump, highlighting the challenges of passing major legislation in a divided Senate and the philosophical differences in government spending and taxation. It touches on infrastructure bills, tax cuts, and the impact of COVID-19 stimulus spending on inflation. The conversation also delves into the role of government in economic recessions and the debate over deficit spending during different economic climates.

Takeaways

• 😐 Biden has managed to pass legislation such as the infrastructure bill, which Trump promised but couldn't achieve during his presidency.
• 🤔 There's a philosophical difference in government spending; some view tax cuts as government spending, while others see it as allowing individuals to keep their own money.
• 🏛️ Despite controlling both houses and the Supreme Court, Trump's administration didn't pass major legislation, which some attribute to the Republican base's resistance to increased spending.
• 💼 The U.S. has a progressive tax system, and to fund a European-style welfare state, middle-class taxes would need to be significantly higher.
• 🔍 The top 20% of Americans pay all net taxes after state benefits, indicating a high level of income inequality in tax contributions.
• 🤝 The Republican Party is divided, which impacts the legislative success of any Republican president, including Trump.
• 📉 There's a challenge in passing legislation that involves cutting government programs, as Americans generally oppose government growth but struggle to agree on specific cuts.
• 🌐 The lack of legislation under Trump is attributed to differing views within the Republican Party about the role of government.
• 💸 The concept of 'spending neutral' legislation is questioned, as government claims of spending neutrality often do not materialize.
• 🌟 The debate over tax cuts and government spending is tied to broader economic discussions, including inflation and the impact of stimulus spending on the economy.

Q & A

What is the main difference between Biden's and Trump's legislative accomplishments mentioned in the transcript?

Biden managed to pass the infrastructure bill within a year, which Trump promised but couldn't achieve during his entire presidency. However, Trump had both houses of Congress and the Supreme Court but didn't pass major legislation.

How does the speaker view the government's role in fiscal responsibility?

The speaker believes that when the government takes money from individuals, it's not being fiscally responsible, but when the government allows individuals to keep their money, it's a positive action. They view tax cuts as the government taking less, not as spending.

What is the speaker's stance on the United States' tax system and its relation to a social welfare state?

The speaker acknowledges that the U.S. has a progressive tax system and that to have a European-style social welfare state, the middle class would need to be heavily taxed. They mention that the top 20% of the American population pays all net taxes after state benefits.

Why does the speaker think there is a lack of legislation passed under Trump?

The speaker suggests that the Republican Party is divided and that Trump, as the head of the party, faced challenges in uniting the party for legislative efforts. They also mention that Republicans generally aim for less government involvement, which could explain the lack of passed legislation.

What does the speaker believe is the fundamental difference between Republican and Democratic views on government tasks?

The speaker believes that Republicans and Democrats have different views on what the government should do. Republicans tend to favor fewer government programs, while Democrats are more inclined to expand government roles, leading to different legislative priorities.

How does the speaker view the concept of 'spending neutral' legislation?

The speaker is skeptical about the government's ability to create truly spending-neutral legislation, suggesting that such claims rarely materialize as intended.

What is the speaker's opinion on the relationship between tax cuts and deficit spending?

The speaker considers continuous tax cuts without corresponding spending reductions as wild overspending and an increase in deficit spending.

How does the speaker explain the inflationary effects of government stimulus spending?

The speaker defines inflation as too much money chasing too few goods and argues that pouring more money into an already inflated economy leads to more inflation.

What is the speaker's view on when it is appropriate to engage in deficit spending?

The speaker believes that deficit spending should occur when economies are heading towards recessions, not when they are doing well, as was the case under Trump's administration.

How does the speaker assess the economic recovery post-COVID-19?

The speaker sees the economic recovery as a V-shaped bounce back after the initial downturn caused by the pandemic. However, they attribute the subsequent slowdown to the effects of the American Recovery plan and not to the natural progression of economic recovery.

Outlines

00:00

💼 Legislative Accomplishments and Fiscal Responsibility

The speaker discusses the legislative achievements of President Biden and contrasts them with those of President Trump. They mention Biden's work in a 50-50 divided Senate and Trump's control over both houses of Congress and the Supreme Court, yet Trump's inability to pass significant legislation. The conversation touches on the infrastructure bill passed under Biden, which Trump had promised but failed to deliver. There's a debate on the philosophy of government spending, with the speaker arguing that tax cuts are not the same as government spending. The discussion also covers the impact of tax policies on the middle class and the need for higher taxes to support a social welfare state. The speaker criticizes both presidents for deficit spending and suggests that the Republican Party is divided, which hinders legislative progress.

05:01

🌐 Economic Trends and Government Intervention

This paragraph delves into economic trends, particularly focusing on employment statistics and economic growth under the Obama and Trump administrations. The speaker questions the effectiveness of government stimulus packages, such as the American Recovery plan, in boosting job growth. They argue that the economic recovery post-COVID-19 was V-shaped and began to level off due to the Biden administration's policies. The speaker also discusses the potential for a recession due to inflation caused by excessive government spending, contrasting the economic conditions under Trump with those under Biden. The conversation suggests that the economy was not actually heading for a recession and that the current inflation and potential recession are consequences of previous economic policies.

Keywords

💡Legislative Accomplishments

Legislative accomplishments refer to the successful passage of bills or laws by a government body. In the context of the video, the discussion contrasts the legislative records of President Biden and President Trump, highlighting the challenges each faced with a divided Congress and the implications for their policy agendas. For instance, the script mentions Biden's infrastructure bill and Trump's inability to pass major legislation despite controlling both houses of Congress and the Supreme Court.

💡Deficit Spending

Deficit spending occurs when a government's expenditures exceed its revenues, resulting in a budget deficit. The video script discusses this concept as a point of contention between different political ideologies, with the speaker arguing that both Biden and Trump engaged in deficit spending, but under different economic circumstances. The script implies that deficit spending can be both a tool and a problem, depending on the economic climate and policy goals.

💡Tax Cuts

Tax cuts are reductions in the amount of taxes that individuals or businesses are required to pay. The script uses tax cuts as an example of a policy that can lead to decreased government revenue, which may necessitate deficit spending. The speaker contrasts tax cuts with government spending, suggesting that allowing individuals to keep more of their own money is not the same as the government increasing its spending.

💡Progressive Tax System

A progressive tax system is one in which the tax rate increases as the taxable amount increases, meaning those with higher incomes are taxed at a higher rate. The video script discusses the U.S. tax system in this context, noting that the top 20% of earners pay a significant portion of all taxes. This concept is used to argue against the idea of further taxing the middle class to fund social welfare programs, as it would require a significant shift in tax policy.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The script mentions inflation as a global issue, attributing it to the economic shutdowns and stimulus spending in response to the COVID-19 pandemic. The speaker argues that continued government spending, such as the American Recovery Plan, could exacerbate inflation by increasing the money supply without a corresponding increase in goods.

💡Infrastructure Bill

The Infrastructure Bill, as mentioned in the script, refers to legislation aimed at improving public infrastructure, such as roads, bridges, and public transport. The video contrasts the passage of Biden's infrastructure bill with Trump's failure to deliver on similar promises, highlighting the political challenges and differing priorities in infrastructure development under different administrations.

💡American Recovery Plan

The American Recovery Plan is a stimulus package proposed by President Biden to address the economic fallout from the COVID-19 pandemic. The script references this plan in the context of economic recovery and job growth, with the speaker questioning the plan's effectiveness and attributing the recovery to pre-existing economic trends rather than the plan itself.

💡Economic Growth

Economic growth refers to the increase in the production of goods and services by an economy over a period of time. The video script discusses economic growth statistics under the Obama and Trump administrations, using them to argue that the economy was not heading for a recession before the pandemic. The speaker suggests that the perception of an impending recession was a result of inflationary policies rather than actual economic indicators.

💡COVID-19 Stimulus Spending

COVID-19 stimulus spending refers to the various government programs and financial assistance provided to individuals, businesses, and local governments in response to the economic impact of the COVID-19 pandemic. The script critiques this spending as a contributor to inflation and argues that it has lasting effects on the economy, even after the pandemic subsides.

💡V-Shaped Recovery

A V-shaped recovery describes an economic rebound that is rapid and sharp, similar to the shape of the letter 'V'. The video script uses this term to describe the economic recovery following the initial shock of the pandemic, suggesting that the recovery was swift but then began to level off, potentially due to ongoing government spending and economic policies.

💡CHIPS Act

The CHIPS Act is legislation aimed at increasing domestic semiconductor production to reduce reliance on foreign suppliers. The script mentions this act as an example of Biden's legislative approach to addressing supply chain issues, contrasting it with Trump's more punitive approach towards China. The act is used to illustrate differing strategies in trade and economic policy under different administrations.

Highlights

Discussion on Biden's legislative accomplishments in a 50-50 divided Senate versus Trump's with both houses of Congress and the Supreme Court.

Infrastructure bill passed under Biden after Trump's failure to do so throughout his presidency.

Opposing views on government spending and tax cuts, with a focus on individual fiscal responsibility.

The role of state and local governments in infrastructure spending versus federal initiatives.

Analysis of the U.S. tax system's progressive nature and its implications for social welfare policies.

Debate on the effectiveness of tax cuts as a fiscal policy tool and its impact on government spending.

The division within the Republican Party and its impact on legislative success under Trump's presidency.

The challenge of passing legislation that reduces government involvement, as opposed to expanding it.

The philosophical difference between Republican and Democratic views on the government's role and legislative priorities.

Foreign policy discussion, including Trump's and Biden's approaches to China and the CHIPS Act.

Critique of the government's claims of spending neutrality and the reality of budgetary outcomes.

The economic debate on tax cuts, spending, and the resulting impact on inflation and deficit.

Comparison of economic conditions under Trump and Biden, including job growth and economic recovery.

The argument on whether the economy was actually in need of stimulus spending or if it was already on a recovery path.

Discussion on the timing and necessity of deficit spending in relation to economic cycles and potential recessions.

The impact of COVID-19 on the economy and the subsequent stimulus spending's role in inflation.

Transcripts

because we can say the reality of it and

we can look at opinion polls what if we

look at like legislative accomplishments

like Biden is working on a 50-50 divided

Senate Donald Trump had both house of

Congress and the Supreme Court and got

like no major legislation pass well I

mean he he he did lose Congress in 2018

but sure but prior to that because we

got the we got the infrastructure bill I

think in one year which Trump promised

for his entire presidency didn't get

anywhere on well I mean yes his his

Republican base was not in favor of mass

spending on infastructure and neither am

I so there's that I think that's mostly

a state and local they were in favor of

mass spending for tax guns that's not a

spending I mean we I mean effectively it

is right like effectively it's not well

if you're cutting tax receipts but

you're not changing the level of

spending like Biden did with the uh Ira

again we have a fundamental

philosophical difference here I think

that when when the government takes my

money that is not that is not the

government somehow being more fiscally

responsible and when the government

allows me to keep my money I don't see

that as the government spending I see

that as my money and the government is

taking less of it that's great but the

end of the day the government is still

going to be in a deficit spending and

they're going to have to borrow money

from the treasure right we have a

spending problem in other words not a

receipts problem is the case that I'm

making but the problem with with Donald

Trump is not that he lowered taxes the

United States has one of the most

progressive tax systems on the planet

and in fact if you wish to have a

European style social welfare state what

you actually need is to tax the middle

class to death I mean the reality is the

top 20% of the American population pays

literally all net taxes in the United

States after after state benefits and

all of this sure so if if you actually

wanted to have the kind of social

welfare state that many liberals seem to

want to have like northern Europe for

example

you'd actually have to tax people who

make 460,000 I I agree with that how do

you explain the lack of legislation I

mean if he's like such a uniter because

I think the Republican Party itself is

is quite divided and I think that Trump

but isn't that his job he's the head of

the Republican Party he's the president

Republican president of the United

States I mean again I don't think that

Joe Biden has passed wildly historic

legislation was the largest like here

here's the problem if you're a

republican the only bills that you can

get consensus on tend to be bills that

either that that let's be real about

this that are tax cuts because as you

would I think agree with when it comes

to polling data Americans constantly say

they want to cut the government and then

the minute you ask them which program

they have no idea what're right exactly

and so trying to it's much harder to

come up with a bill to cut things than

it is to come up with a bill to add

things coming which is why spending was

out of control under under Trump as well

but there are some Republicans who still

don't want to spend on those things

right so inherently the the task that

this goes back to the first question the

task that Republicans think government

is there to do is different than the

task that Democrats think that

government is there to do so the way

that the very metric of success for a

Democratic president versus a Republican

president namely for example pieces of

legislation passed as a republican one

of my goals is to pass nearly no

legislation because I don't actually

want the government involved in more

areas of of our life I want to ask a

couple questions on the foreign policy

yeah okay wait real quick just so for

instance like Donald Trump wanted to

punish China and he wanted to bring uh

microprocessor manufacturer the United

States uh Biden did that with

legislation with a chips act uh you talk

about like spending being out of control

and I I mean I can agree with that I

think anybody looks at the numbers has

to agree with that but why not pass

legislation like the inflation reduction

act um which is at least like spending

neutral right like why are there not

bills where Donald Trump could take well

I mean first of all I think that

whenever the government says something

spending neutral it rarely materializes

that way that is not going to be a

spending neutral Bill sure but there's a

difference between like at least they

say it's spending neutral versus this is

a $500 billion bill over like 10 years I

well but again I don't see a tax cut as

a matter of quot on spending neutrality

the big problem is they keep spending

not that they are allowing me to keep

the money that I earned and they did not

earn

okay so then just to understand so if

somebody just did massive like

reductions in tax receipts so tax cut

after tax C after tax cut but they

didn't change spending at all you

wouldn't consider that like an increase

in deficit spending or out of control

spending you would just say they're just

tax cuts no the opposite I I would

consider it a wild I I would considered

a wild overspending okay meaning so then

was it under Trump then when he did the

tax I mean the spending by the way under

under Biden is way worse than it was

under of course but we're in postco

right Co ended effectively I mean you

live in Florida Co effectively ended in

the State of Florida by the middle

middle of

2021 if you're a vacc fan by like April

May of 2021 there was wide availability

of vaccines whether or not you like the

vaccines and at that point we were done

I agree but like we're in a post like

how many trillions of dollars have been

dumped in worldwide that are like

leading to inflation right the inflation

is like a worldwide uh issue right now

because of the economy shutting down for

a year or two it's not like those

effects are gone in one year right covid

might be gone but the after effects of

all the stimulus spending and the

unemployment everything else the

definition of inflation is too much

money chasing too few goods so pouring

more money on top of that makes for more

inflation that's what it does sure I

agree um but like there's also the

definition of when do you deficit spend

is when economies are headed for

recessions right rather than when

economies are doing really well like

they were under Trump and he was deficit

spending whereas Biden can at least make

the argument that I should I ought to be

deficit spending because the economy is

heading for potential recession so

here's the thing I don't think that the

economy was actually headed for

recession in in fact if you look at the

economic St Economist said they it was

Economist still saying that there's like

a recession coming right right but that

that was largely because of the after

effects of inflation meaning if you

inflate the economy what you're going to

end up doing is bursting a bubble and

then when that bubble bursts you'll get

a recession I mean that was the basic

idea right the idea the question was

whether you're going to get the soft

Landing but if you actually look at for

example the employment statistics or the

economic growth statistics in the United

States what they look like under the

last year's Obama and then Trump I mean

this is what the chart looks like is it

looks like this and then it hits March

of 2020 it goes like that yeah right and

then by like September it bounces back

up right it's a v-shaped recovery and

then it starts to Peter out sure because

of the American Recovery plan right that

Biden did as well I mean four million

jobs yeah no I'm not going to attribute

it to that because the the rates of

growth in in job growth from September

October November were actually very

similar to the rates of job growth after

Joe Biden took

office