ECONOMY IS GOOD

President Obama will turn over to President-elect a good economy* with prospects of getting even better if Trump doesn't screw it up with a big personal tax cut as he threatens.  (See my 2010 piece on the Effectiveness Of Taxes)**

Nor is the economy struggling much, based on last week’s reported data. October housing starts jumped 25% from September, with help from a big rise in single-family homes; jobless claims for the week ended Nov. 12 dropped to 235,000, the fewest since 1973; and retail sales had their best two-month stretch in at least two years. Combined with Trump’s stimulus plan, there is the potential to drive economic growth toward 3% or more, says Jefferies economist Thomas Simons. “The fourth quarter is starting to show what the real strength of the economy is,” he says.*

I am in favor of Trump's infrastructure plan, but doubt he will get anywhere near the trillion dollars he asks for.  A problem with the government programs is that the biggest amount of money is in the first year and then there are complaints that the Civil Service  is dragging their feet, but it takes some time to ramp up (You can't issue contracts over night, for example).  As President Obama said, there is no such thing as a shovel ready program.  Then the program is over in three years when the program is finally ramped up and in high gear.  Then it is time for a new program much different so everyone has to reshift grears and start over.  Wash, rinse, repeat.  No drying.  If you are going to work for the Federal government, you have to accept you are a political football.

* http://www.barrons.com/articles/stocks-rise-almost-1-on-solid-economic-growth-1479537677?mod=BOL_hp_we_columns
** http://stopcontinentaldrift.blogspot.com/2010/05/effectiveness-of-taxes.html