Is there any proof that tax cuts stimulate the economy? We know they stimulate the stock market, because that’s where the wealthy invest their winnings… er, savings. At the same time, these cuts add dramatically to the deficit. Remember the deficit? It’s the thing Republicans freak out about when Democrats are in office.
There is actually a lot of proof that tax cuts do NOT stimulate the economy. This notion is based on the false assumption that the money ends up in the hands of consumers who spend it on kitchen remodels and new cars. Consumers pay off their credit cards.
In the 80s, Reagan set out to reduce government spending, taxes, and regulation. As a result, the national debt tripled, and in less than eight years, the U.S. went from being the world’s largest creditor nation to the world’s largest debtor nation.
In 2001, Bush and the Republicans again cut taxes, this time while our nation was at war – as it is now – and put the cost on our national credit card. They had inherited a surplus from the Clinton administration, but these tax cuts, together with the unfunded wars (which we have been slowly losing for sixteen years) put our country $19.9 Trillion dollars in debt, or $61,365 for every American. Rather than address this terrifying issue, we are poised to make it much, much worse.
The result of the proposed tax cuts will have a positive short-term effect on the economy. The stock market will probably go up. High-end real estate prices will hold. The middle class gets cut in, too, but the net effect to them, as services they rely on become more expensive, scaled-back, or eliminated, will be negative. But that’s later. Today it’s doubtful that, once the tax cut parade goes by, Republican voters will realize they’ve been left to clean up after the elephants. Later they’ll say government malfeasance caused the economy to collapse, and they’ll be right. The malfeasance is unfolding before us today.
Once we run the deficit up to 1.5x GDP (it’s 106% now) our books will resemble those of bankrupt nations. Services will be cut across the board. Health and education will suffer. Democrats will be blamed and derided as spendthrifts. And that’s exactly what the Republicans want.
This cynical Republican tax plan is nothing less than a scheme to transfer public wealth into private hands. I laugh at the rubes who voted for Republicans. There. I said it. Rubes hate educated coastal elites yet they do everything they can to make us richer and themselves poorer, less healthy, and less educated, just so a transsexual won’t pee in the girls’ room.
Now I’ll make an even darker prediction. This tax travesty is the only meaningful piece of legislation the Republicans will pass during Trump’s presidency. Greed is the only thing they all agree on. There will soon be evidence about Russia. A few people will be sacrificed (I hear Manafort is real estate shopping in Moscow). Congressional Republicans will be decimated in the 2018 mid-term election, but gerrymandering and aggressive voter suppression will keep them in power. Therefore, no impeachment. Faced with historically low approval ratings, a hostile press, and a deeply divided Congress, Trump will, in a snit, start a war and wrap himself in the flag to get re-elected. It will almost certainly work.
Take a knee.