Fareed Zakaria has one of the most fact based programs on cable, but very few highlight his work on blogs. Here he exposes the Trump budget fraud on Americans in a comprehensive manner.
Trump’s fraudulent budget debunked
Fareed Zakaria methodically takes down Trump’s budget as he castigates the GOP for ignoring math, science, and facts to govern ideologically with lies.
Here is the transcript for Fareed Zakaria’s excellent piece on the budget and the GOP’s voodoo economics.
The number I want to focus on is three point four trillion dollars. At the end of May, the Trump administration released details of its proposed budget for the next fiscal year. And on July 13th the nonpartisan Congressional Budget Office released their analysis of President Trump’s budget.
The CBO says the President’s budget underestimated the loss in federal tax revenues caused by its proposed tax cuts by a whopping three point four trillion dollars. How could the smart Goldman Sachs guys on Trump’s economic team, Gary Cohn, Steve Minuchin, make such a big basic math error. Actually, they did it intentionally.
The administration assumed that because of its tax cuts the American economy would grow by three percent a year for the next decade. The CBO instead says the president’s plan would increase GDP growth to 1.9 percent which most economists agree is the sensible assumption. Note that the American economy has grown on average just 1.8 percent over the last years, no more.
This method of fudging the numbers is called dynamic scoring. Common sense would tell you that if the government cuts taxes it’ll get less money in tax revenues. But sprinkle the magic pixie dust of dynamic scoring and you can project much higher growth rates and then the revenue numbers saw upwards in theory.
The story of dynamic scoring is the story of the Republican Party’s abandonment of facts, science, and analysis in favor of ideology. Decades ago Republicans were advocates of fiscal restraint. They were the party of green eyeshades, conservative assumptions, and careful accounting. They did not believe in wide-eyed assumption and in counting chickens before they were hatched.
In fact, when Ronald Reagan proposed tax cuts that he claimed would pay for themselves his traditionalist Republican rival George Bush Senior derided his approach as voodoo economics. But with the Reagan Revolution came a new mantra. Tax cuts were the answer to every problem and the economics could be bent to make it all work out in theory.
In fact, the national debt tripled under Ronald Reagan. And After George W Bush cut taxes the national debt increased again. Bill Clinton by contrast actually raise taxes and ushered in stronger growth and higher tax revenues. But the mountains of evidence have not stopped Republicans from using dynamic scoring.
In 2010, Kansas governor Sam Brownback rode a tea party wave to power and he soon slashed taxes across the board predicting that there would be a boost to the Kansas economy and thousands of new jobs would be created. Except, the promised growth never materialized. Instead, between 2013 and 2014 the state’s budget of 6 billion dollars was butchered as tax revenues fell by a massive seven hundred and thirteen million dollars. This year there was a 218 million dollar budget shortfall forcing state legislators to pass tax hikes despite Brownback’s opposition. In 2015 the GDP of the state grew by an anemic 0.2. percent while the rest of the nation grew at 1.6 percent. Job growth since the cuts dropped to a dismal 3.5 percent while the rest of the nation experienced a rate of 7.6.%. Sam Brownback has been rewarded for his failure by being nominated this week to be the state department’s Ambassador at Large for International Religious Freedom by Donald Trump.
Bruce Bartlett who was a senior policy adviser to presidents Reagan and Bush senior says that dynamic scoring is not about honest revenue estimating. It’s about using smoke and mirrors to institutionalize Republican ideology into the budget process. Steve Minuchin, Gary Cohen, and others in the administration know better. Instead of smoke & mirrors, they should use facts and figures, economics and analysis on a subject as serious as the nation’s economic outlook.