I was going to simply include this in the tab-clearing, but I wanted to highlight a few of things from this Axios piece, Trump’s $4 trillion deficit bomb.
First, there’s this:
The White House Council of Economic Advisers projected that the bill would boost GDP by 4.2% to 5.2% in the short run — a staggering level of growth that goes far beyond the mainstream consensus.
This is just an absurd assertion, but it is in keeping with the long-term fantasies about the growth-inducing powers of tax cuts, especially those for the wealthiest Americans. It is also reflective of the long-term fantasy GDP goals of Trump.
For what it is worth, the Tax Foundation projects the long-term effects on GDP of these proposals to be +0.6% over the next decade.
The Penn Wharton analysis projects the following over a longer period of time.
Over the next 30 years, the House reconciliation bill increases GDP growth slightly, and GDP would be 1.7 percent higher in 2054 than under current law.
Second, the propaganda (i.e., official lies) does continue to flow (emphasis mine).
White House press secretary Karoline Leavitt went as far as to claim that the bill “does not add to the deficit,” and that it would actually save $1.6 trillion through spending cuts and Medicaid work requirements.
The Axios piece notes projected deficits of $3.3 billion to $4 billion.
Third, there’s this.
“This tax bill’s enormity is being underplayed … [It] will cost more than the 2017 tax cuts, the pandemic CARES Act, Biden’s stimulus, and the Inflation Reduction Act combined,” Jessica Riedl, a budget specialist at the conservative Manhattan Institute, told Yahoo Finance.
Allow me to stress that the Manhattan Institute is a very conservative organization.
But it strikes me as especially significant how, as a general matter, discussions about tax cuts never seem to be handled the way material benefits to the public are, even in the mainstream press.
I get it on one level. Spending is about cost while taxes are about revenue, so it seems to many people that they aren’t the same thing. But when it comes to budgeting, they both are relevant to whether the budget is balanced or not. If, at the end of the day, money has to be borrowed to meet the budget, it doesn’t matter if the borrowing is because of more spending or less revenue.
I know it is easy to fall for the notion that tax cuts are just letting people keep more of their money, but it has to be understood as not happening in a vacuum. Letting someone who makes seven figures annually keep more of their income so that people making less than $20k a year lose income as well as access to basic food assistance and health care is a poor moral trade-off.
It is easy to pretend like everyone can be wealthy if they just stop playing X-Box and work hard, but then there is the pesky reality that notes that one can work very hard and still need SNAP and Medicaid.
While we can all agree that things like the CARES Act and the Trump tax cuts add to the deficit, I would note that trying to address the national impacts of a pandemic are in a different governing universe, and indeed a different moral universe, than one in which, as per the Penn Wharton analysis, the distribiutional effects of the BBB go to higher income earners and hurt the poorest.
Rich Americans get a few more dollars to invest and save, while lower-income Americans get cuts to vital services. This is, again, a morally different reason for adding to the debt than investing in local infrastructure or providing tax credits for children that bring them out of poverty (you know, the one that expired).
It is impossible to take any arguments about the debt from Republicans as long as they pretend like tax cuts are freebies, but the scourge of society is spending to make life better for millions of Americans.
I am all for a serious discussion about annual deficits and the accumulated debt, but I learned a long time ago that Republicans, as a group, are not interested in such a discussion.
Just for some combination of comic relief and major frustration, I will end with this.
I would note two things.
- Massie is a Republican from Kentucky.
- The term is “deficit hawk,” not “fiscal hawk,” but whatevs.
