A blinkered Fiscal Vision-There is no such thing as a free lunch, Mr. Trump


Match 7, 2017

Donald Trump may have veered from self-inflicted crisis to self-inflicted crisis over the course of his young presidency, but he has kept one policy goal steadily before him: tax cuts for the wealthy. A case in point is his recent proposal to find $54 billion more for military spending by slashing Head Start, food aid for low-income pregnant women, environmental protection and other programs. Those trade-offs are bad enough in themselves. But they also reveal a ruinous worldview in which nondefense spending is always excessive and tax cuts are necessary for growth. This sort of thinking will only weaken the economy and betray the people who put their hopes in Mr. Trump.

Spending on the nonmilitary discretionary programs that have been targeted by Mr. Trump comes to 3.2 percent of the economy — well below the average of 3.8 percent going back to 1962. By calling for cuts that would average about 15 percent in almost every category other than defense and “mandatory” programs like Social Security and Medicare, Mr. Trump would undermine his promises to make sure “every child in America has access to a good education,” to help the “poorest and most vulnerable” and to rebuild infrastructure. Other categories at risk of being cut include scientific and medical research, job training, national parks, air traffic control and maintenance of dams.

Worse yet, some Republicans may call for limiting Mr. Trump’s proposed reductions by cutting instead from Social Security and Medicare, which Mr. Trump has pledged to protect. That would be needlessly tightfisted. A rich nation with a resilient economy can afford to care for both the poor and the elderly. Besides, support for the elderly is already becoming stingier as a result of changes instituted years ago, including an increase in the Social Security retirement age from 65 in 2002 to 67 by 2027.

That is not to imply that all spending cuts are off limits. But it’s sensible to mix them with tax increases. The approach of Mr. Trump and congressional Republicans would deeply cut taxes even as spending is slashed.

Mr. Trump has essentially called for three tax cuts: a personal income tax cut, a corporate income tax cut and a cut achieved by repealing the Affordable Care Act. Specifics are scant, but one thing is clear: All three would overwhelmingly benefit the wealthiest Americans. A campaign draft of the income tax plan indicated that at least half of the proposed multitrillion-dollar tax cut would flow to the top 1 percent of earners in 2025, according to the nonpartisan Tax Policy Center. Repealing the A.C.A. would end the additional 0.9 percent Medicare Hospital Tax on incomes above $200,000 ($250,000 for married couples).

Image result for trump's fiscal policy plan
Donald Trump is a bold conservative. But he’s not just a conservative on fiscal issues… He is a foreign policy conservative, too! That’s why  on MSNBC’s Morning Joe, Donald Trump explained his plan to do what President Barack Obama is unable to do: Destroy the Islamic State (ISIS). But make sure that these mentally deranged Islamic fanatics don’t screw  you first like they did to George W. Bush on September 9, 2011

Mr. Trump and Republican lawmakers say tax cuts spread prosperity by generating economic growth and thus increasing federal revenue — a thoroughly debunked claim. Experience shows that large tax cuts either deepen the nation’s debt or necessitate spending cuts. Forecasts from the Congressional Budget Office indicate that if tax revenue is not increased in the coming decade, spending cuts of $3 trillion — or about 25 percent outside of Social Security and Medicare — will be required to keep the debt at its current level of 77.5 percent of the economy. Clearly, if defense spending rises in the coming decade, as Mr. Trump has called for, while tax revenue declines, either the debt will rise or spending cuts will need to be even deeper.

Both outcomes can be avoided by abandoning deep tax cuts. It would be wise to take on new debt for stimulus during economic downturns or for infrastructure investments, but not to finance tax cuts during a military buildup. Economic activity could be encouraged by bolstering wages, including federal overtime protections. Tax revenue could be raised in constructive ways, including a carbon tax.

Giving the wealthy never-ending tax cuts while gutting programs for the middle class would create more of the resentment and inequality Mr. Trump has promised to address.

6 thoughts on “A blinkered Fiscal Vision-There is no such thing as a free lunch, Mr. Trump

  1. This article is beautifully crafted but is devoid of sound foundation and relevant empirical data. US stock markets, a solid representation of US economy, has soared 3 trillion dollars since the election in part, if not mainly, caused by expectation on Trump’s economy policy. The percentage of Americans who think the nation is on right track has jumped drastically since the election and has reached 10-year record.

    A solid foundation to gauge US politics is viewing the US politics as a spectrum of left, center, and right, whereas the extreme right is defined as anarchy, and the extreme left is defined as nationally concentrated power as in a Communist fascist nation. The aforementioned left-center-right definition is of course not the only definition available in the world, but is very likely to be the only definition relevant to people (the Americans) who has been aspiring to self-government since the birth of the US. Historically, the US government sits around the center and slightly to the right, and it moves in accordance to the mood of the people.

    Many assertions of the article are assuming the goodness of individual wealth equality. For example, it claims that common thread of Trump’s policy is benefiting the rich and benefiting the rich cannot possibly be of any good because it causes individual wealth inequality, which itself assumes individual wealth equality is the ultimate goal of a socialist society. Since socialism claims its universality, all nations therefore must have ultimate goal of achieving individual wealth equality.

    But, what if, a people, like those of Americans, don’t want individual wealth equality as the society’s ultimate goal, but want individual liberty as the ultimate goal to be supported by the societal institutions? As strange as this may sound to Malaysians, please keep in mind there is a people, half the globe away, who still recite the pledge daily in school and sport games and all kinds of ceremonies, that “liberty and justice [are] for all.”

  2. The Trump presidency gets loonier by the day. His presidency started with his childish temper tantrum about crowds at his inauguration, but that seems like small beer now. To divert and distract attention from his administration connection with the Russian, he started a childish temper tantrum to accuse the former president of ordering his phone tapped. This whole thing is completely batshit crazy. I’m stumped. How much hate does he have against a black president anyway? Or is it against Muslims because Obama has a Muslim middle name?

    Every time Trump is in a bad mood whenever he isn’t being universally praised, something like this happens. He was fumed upon learning about Jeff Sessions being caught lying to the Senate of his meeting with the Russian and had to recuse from the investigation of the Russian interference with the 2016 presidential election. He saw an article in Breithart and decided to throw some chum in the water to accuse Obama of ordering his phone tapped. The White House has even confirmed this. Everyone knows that Trump is a grand master in making stuff up.

    Are tax cuts and Obamacare really worth so much to the Republicans that they’re OK with having this ignorant, obnoxious, delusive, egoistic, narcissistic, racist, short-tempered child in the White House for the next four years? Maybe nothing serious will happen during that time, and we’ll be more-or-less OK. But what if the chance that something serious does happen and Trump does some real damage to the United States or to the world? Is it really worth taking that chance, just for some tax cuts?

    Wake up, my fellow Republicans! For the good of the nation sake, start impeachment now!! If not, impeachment will come when the Democrats regain the Congress next year and you’ll be in the unemployment line!!!

  3. Tax cuts of the kind that are proposed will never bring the growth the US so desperately needs… the President needs to create jobs – and millions of them – in order to do that he had better sit down and read and digest how it was done in the New Deal… and just copy… there is no other way to get millions of unemployed Americans out of poverty… a poverty that has been brought about mostly by the very kind of cuts that are now in the line…
    Trump’s entire Presidency will stand or fall on job creation…currently he is on the wrong track…

  4. Trump just screwed the people who voted for him with his healthcare proposal. BUT Najib’s and Hadi’s PAS voters have already screwed them over even before they voted for them..

  5. It is the last refuge of a scoundrel to label political opponents as racist without providing details for the labeling.

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