Voodoo Economics, the saga continues
Out of the murky depths of Donald Trump’s ego emerges something approximating a public policy position – or at least one that doesn’t involve walls or deportations.
We speak of actual fiscal policy. And here’s the thing: Of those details that aren’t too vague to ascertain, factcheck.org says Trump’s plan would blow up the federal deficit like few proposals before.
Trump says his plan is revenue-neutral. The tax experts solicited by factcheck.org say it would reduce revenue to the U.S. Treasure by more than a trillion dollars a year for 10 years.
Trump’s proposal would cut tax rates dramatically, eliminating the federal income tax for single people earning under $25,000 a year and couples $50,000 a year, while lowering the highest income tax rate from 36 percent to 25 percent.
Trump says he would make up for lost income by closing a host of loopholes, though that’s where things get vague. As is so often the case, we are to trust in the magic of tax cuts to generate wealth and new revenue.
Sound familiar? Ever since George H.W. Bush called it “voodoo economics” under Ronald Reagan, the Republican Party has been under the spell of tax cuts as the answer to any and all fiscal needs.
What’s happened? A hefty budget surplus that was projected years into the future under Bill Clinton has become a national debt without end.
We owe this to a well-established brand of political blindness. Call it fiscal disservatism.
“Fiscal disservatism” isn’t a term Webster’s recognizes, but it should.
The whole idea is that we strangle parts of government that we deem unworthy, like social services and health care, while building up other parts of government that still cost a lot of money – wars on multiple fronts, prisons, the “drug war,” Homeland Security.
And we pay for these things how? We don’t. We borrow, while decrying debt.
Fiscal disservatives say we pay too much for government, though the truth is as plain as the deficit staring them in the face: We don’t pay enough. The percentage of GNP paid in taxes is the lowest it has been since the 1950s.
No need to focus on Trump entirely. Jeb Bush has his own plan that analysts say compares to Trump’s – what the New York Times calls a “tax-cuts-for-just-about-everybody” plan with a projected Treasury hit of $3.4 billion over 10 years.
This would make Jeb’s proposed tax cuts more sizable than those enacted by his brother, and we all know how those tax cuts made the Bush economy take off like a racehorse, and how those tax cuts paid for themselves.
Oh, wait; no, they didn’t.
If supply-side economics (I like to call it faith-based budgeting – faith in the power of tax cuts) worked as advertised, don’t you think we’d know it by now?
Sure, tax cuts generate economic activity (as does spending), but never enough to make up for the lost revenue needed to pay for all the government that even so-called small-government types say they need.
One would think that the tea party, which says the deficit is the greatest problem facing America, would denounce policymakers and politicians who offer only to make that problem worse.
But these Republicans are more interested in paying less than their share of the government they bought than paying down the debt their children will inherit.
So as we approach more tea party-inspired shadow cinema over the debt ceiling, know that those who scream loudest about it have little interest in doing something real about it. For in a deficit situation, a tax cut is exactly the same as more spending. And the result is more borrowing.
Longtime newspaperman John Young lives in Colorado.
http://johnyoungcolumn.blogspot.com/2015/10/that-voodoo-that-they-do-so-well.html
