Smart. Sharp. Funny. Fearless.
Wednesday, April 25, 2018

Reprinted with permission from Creators.

 

The U.S. economy is humming like a bee in clover. Gross domestic product is growing at a solid clip; inflation has stayed down; and unemployment is at its lowest level in 17 years. So Republicans have soberly assessed the economic conditions, carefully considered all the options and selected the prescriptions that would do the most to enhance long-run prosperity.

Sure they have. And I’m Serena Williams. Actually, they want the only thing they ever want: tax cuts. Most things in this vale of tears are tragically temporary. But the GOP’s insistence on reducing taxes is eternal.

Republicans have long claimed that tax cuts produce faster economic growth. This, however, may be the first time they have claimed that tax cuts produce faster growth before they have been approved.

After the Commerce Department reported that the annual GDP growth rate rose to 3 percent in the third quarter, the chairman of the White House Council of Economic Advisers boasted that it happened because businesses were jazzed about the prospect of lower corporate tax rates. “It’s clear that is a major reason,” declared Kevin Hassett. He predicted that if the tax cuts don’t pass, the market will tank.

In fact, it would be hard to find a less auspicious moment to cut taxes. There is no downturn calling for fiscal stimulus. Tax collections are not high by historical standards. Revenues are too low to cover obligations. The federal budget has a large and persistent deficit, which the tax cuts would aggravate.

But so what? Cutting taxes is the centerpiece of the Republican approach to governing. George W. Bush said we needed a tax cut in 2001 because the federal surplus was too big. In 2002, the pretext was the need for stimulus to recover from a recession. Even two major wars costing trillions of dollars were not considered a good reason to raise taxes.

In 2008, the Great Recession provided another rationale for the same play. But that recession ended more than eight years ago. And still, the only tool in the Republican tool kit is this all-purpose potion.

A frequent pretext for it is the “starve the beast” argument — that cutting taxes forces government to shrink by denying it nutrition. This theory, note, directly contradicts the conservative claim that cutting taxes raises revenue by supercharging the economy. In any case, Ronald Reagan’s former chief economist, William Niskanen, refuted the theory by documenting the historical fact that when federal revenues go down, outlays go up.

For eight years, congressional Republicans denounced President Barack Obama for the size of the national debt, which more than doubled during his tenure. In 2011, tea party champion Rep. Michele Bachmann, R-Minn., opposed a higher debt ceiling because “America cannot keep borrowing money it does not have.” During his campaign, Donald Trump said he would pay off the national debt in eight years.

But Congress’ latest budget resolution is the equivalent of inviting an unreformed alcoholic to hang out with Mila Kunis in the Jim Beam warehouse. It makes no attempt to eliminate the deficit, much less the debt. It provides for tax cuts that it says would increase the debt by $1.5 trillion over the next decade.

In practice, the results wouldn’t be that bad. They would be worse. The Tax Policy Center in Washington estimates that even after accounting for the positive economic effects of the tax cuts, revenue would plunge by $2.4 trillion over the next 10 years.

Few GOP members seem to mind. That’s in keeping with the petrification of their thinking on tax cuts. Once, it was a remedy addressing existing circumstances. Then it became a general principle. Finally, it became a religious dogma, doubted only by irredeemable heretics. Taxes may never be raised; they must always be cut.

That policy might make sense if spending were reduced to reflect the lower revenue. But the party has largely given up the goal of curbing federal outlays, much less balancing the budget. When the Senate approved the plan to cut taxes and revenue by $1.5 trillion, it voted to trim just $1 billion — billion, not trillion — on the spending side.

For eight years, congressional Republicans warned that if Washington continued to live far beyond its means, the day would come when we would all suffer the consequences. Under their fiscal plan, the consequences wouldn’t change. They’d just arrive sooner.

Steve Chapman blogs at http://www.chicagotribune.com/news/opinion/chapman. Follow him on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

 

11 Responses to Republicans Embrace Tax Cuts And Ruinous Deficits

  1. So the GOP idea is to forget about the national debt they constantly moaned about during the eight years of the Obama administration. We can see where this is going. Anything having to do with promoting the general welfare (take a look at the Constitution) will get scrapped as being too expensive. Anything that comforts the comfortable will be funded to the max–especially the GOP’s beloved military budget, which fills the pockets–overflows them, really– of arms manufacturers and dealers. The political contributions will pour in–on the back of the national debt–and GOP yes men (few yes women) will continue to get elected to run their perpetual motion machine. At some point, taxes will rise for the many, not the few, since there are so many of the many and so few of the few, you know, the job creators. Is there a way out of this mess?

      • The Trumpian one starts with Hillary Clinton, Barack Obama, emails, Benghazi, and The Wall. The honest one, though, is the one I’d like to hear.

    • There is no way out when you have a political mechanism that encourages and sustains a lust for money and entices the worst human impulses to flow out w/o restraint, without an ability to “regulate” the impulse to acquire.
      Humans are easily inclined towards accruing wealth—accruing wealth releases endorphins which creates a strong sensation of pleasure. Anyone who manages to cultivate a sense of moral restraint and the discipline to control one’s appetite for the good things will have an advantage by “regulating” such an appetite. Such is not the case among the majority of the GOP and its supporters.

      “Regulation” is largely seen as synonymous with a curse among many in America, and so we have a wave of hedonism running with wild abandon to stave off the curse of regulating this appetite. Especially with politicians, and even more so among the GOP faction. There are no laws, judicial decisions, or executive orders than can curb hedonism.

      So, the short answer is “No”, if we insist that the solution come from the secular realm of politics and big business.

    • Every GOP president since Nixon’s 2nd term has governed using significant deficit spending; and Carter, Clinton and Obama all worked to bring the deficit spending they inherited down with Obama reducing deficit spending more than any other president. Even Carter brought spending down such that our national debt to GDP ratio essentially bottomed out during his presidency at about 35%.

      In making the following statement: “The U.S. economy is humming like a bee in clover. Gross domestic product is growing at a solid clip;” Steve Chapman apparently like many economists today fails to realize why the American economy is apparently ‘humming like a bee’ and it’s not really as much because the American public is really intentionally spending all that much; it’s primarily because there are so many Americans who are having to totally rebuild their lives and homes, because of all the natural disasters that have befallen America since Donald Trump took office.

      From an unusual number of strong hurricanes that have destroyed thousands upon thousands of Americans lives (everything they own), to floods and tornadoes and wild fires and even the rising oceans that are forcing hundreds of thousands of Americans to go out and not only replenish everything in their houses and even their wardrobes, but also to rebuild. It’s not by accident that Caterpillar has seen some of its highest ever profits this last quarter. It’s got nothing to do with Donald Trump improving our economy – it’s all about what Mother Nature has been doing to America.

  2. The GOP is having a major mental crisis. After hungering like starving beasts for complete power in government, and having achieved this self-centered ambition, we now have a Party unable to function in a normal manner, so drunk from excessive greed has the Party become.
    This irrational singular focus of taxes is driving the entire membership into a tailspin. Little wonder that such an inordinate fascination with all things monetary has resulted in a growing insanity across the board in the GOP ranks.

    • Yes, it’s clear that the GOP has become drunk with power and they’re acting exactly like someone who is drunk and because of that they’ve lost all sense of reason and are resorting to all sorts of excesses.

      • The analogy of alcohol and drunkenness to this binge the GOP is on deserves close scrutiny and long reflection. A rise in excessive behavior comes with being addicted, and in the case of the GOP it’s with money.
        And since rational behavior and clear thinking is impossible when addicted or drunk, we can expect the GOP to think that night is day, and up is down.

  3. Trump has his issues with mental stability, this much is evident. But the GOP has a similar problem, as well as sharing a lot of Trump’s cold and callous attitudes, mirror to a degree his narcissism, and proudly display a stubbornness that makes a mule seem quite compliant.
    Only a collection of dimwits would perennially parade idiotic monetary proposals which as clear as day signal generous benefits for the wealth, while everyone else is an afterthought. The frantic urge to contort the tax codes to benefit themselves and other well-to-do political sycophants is truly astounding, and a constant reminder that this is a Party that needs to undergo group therapy.

  4. What I can’t understand is why the Republicans think we need a tax cut.
    Unemployment is low. Stock market is up. Help wanted signs everywhere (at least where I live). If we make the economy grow where are we going to find the manpower/womanpower to provide the labor. I know! We have to bring in
    foreign workers, just like Mr. Trump does at his business’s

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