The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Reprinted with permission from Alternet

With fears of a recession growing in the United States, multiple outlets reported that White House officials were discussing a possible payroll tax cut as a stimulative measure to boost the economy.

The New York Times reported:

Mr. Trump continues to insist the economy is “doing tremendously well,” and he and his advisers publicly dismiss any notion of an impending recession. But behind the scenes, Mr. Trump’s economic team is pulling together contingency plans in the event the economy weakens further.

Officials inside the administration have drafted a white paper exploring a payroll tax reduction, which would seek to boost the economy by immediately injecting more money into workers’ paychecks. In 2011 and 2012, the Obama administration employed a two-year payroll tax cut in an effort to stimulate what was a sluggish recovery from the recession that ended in 2009.

White House officials, however, dismissed the notion and denied that such measures were under consideration.

But asked about possible tax cuts on Tuesday, Trump confirmed that they were, indeed, possible.

“Been thinking about payroll taxes for a long time,” Trump told reporters.

That would be an odd comment to make, since just the day before his staffers were denying that a payroll tax cut was on the table. But it makes perfect sense if the plan is, indeed, intended as a recession-fighting measure. Trump doesn’t want to admit that he fears the economy could be headed for a downturn, but that appears to be exactly what’s happening.

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

For a long time, inflation has been the phantom of the American economy: often expected but never seen. But the latest Consumer Price Index, which showed that prices rose by five percent from May of last year to May of this year, raises fears that it is breaking down the front door and taking over the guest room.

The price jump was the biggest one-month increase since 2008. It appears to support the warning of former Treasury Secretary Larry Summers, who wrote in February that President Joe Biden's budget binge could "set off inflationary pressures of a kind we have not seen in a generation." Senate Republican leader Mitch McConnell charged last month that the administration has already produced "raging inflation."

Keep reading... Show less

Close