We still have time to stop the latest insanity in Washington. This crop of Republicans has taken the madness to the next level. This one could destroy the future of an entire generation. It is time for us to stop fighting among each other and keep our eyes on those that are pilfering us with a smile. But you can stop it.
Stan Collender, a Forbes contributor, wrote a telling piece that should be our call to action titled "GOP Tax Bill Is The End Of All Economic Sanity In Washington." Many activists understand that the Republican tax cut scam is terrible. Collender adds a new dimension extrapolated to several years out and to reality-based politics which means if this bill becomes law, reversal would be less likely than the attempted ACA reversal.
There is no reason for tax cuts now. In fact, the current wealth and income distribution mean tax increases are needed to mitigate the aberration within capitalism that rewards many who have benefited not commensurate with their value or production. Collender writes,
The GOP tax cut now working its way through Congress will be the start of a decades-long economic policy disaster unlike any other that has occurred in American history.
There's no economic justification whatsoever for a tax cut at this time. U.S. GDP is growing, unemployment is close to 4 percent (below what is commonly considered "full employment"), corporate profits are at record levels and stock markets are soaring. It makes no sense to add any federal government-induced stimulus to all this private sector-caused economic activity, let alone a tax cut as big as this one.
This is actually the ideal time for Washington to be doing the opposite. But by damning the economic torpedoes and moving full-speed ahead, House and Senate Republicans and the Trump White House are setting up the U.S. for the modern-day analog of the inflation-producing guns-and-butter economic policy of the Vietnam era. The GOP tax bill will increase the federal deficit by $2 trillion or more over the next decade (the official estimates of $1.5 trillion hide the real amount with a witches brew of gimmicks and outright lies) that, unless all the rules have changed, is virtually certain to result in inflation and much higher interest rates than would otherwise occur.
He concludes with several inconvenient truths.
- The $1 trillion a year budget deficit will not be the result of cyclical changes that will be reversed when the economy improves. These will be permanent structural deficit increases.
- The tax hikes that will be needed to resolve the structural imbalance between federal spending and revenues will be impossible for political reasons.
- Whenever the U.S. economy grows more slowly than expected or there's a downturn, an annual deficit of $2 trillion could easily become the norm.
- The federal government will have far less ability to respond to economic downturns unless previously unimaginable and politically intolerable deficits, tax increases or spending cuts suddenly become acceptable.
- Reduce the national debt? As they say in New York, fuhgeddaboudit at least in the next decade.
- Much more national debt plus rising interest rates means interest on the national debt will be the fastest growing part of the federal budget.
- Without massive cuts in Social Security, Medicare and the Pentagon, it won't be possible to reduce federal spending enough to do more than tweak the deficit.
- Washington's ability to invest in anything new that will improve the economy (think infrastructure, education and medical research) will be far less given the already-high deficits.
- Even though the limits to monetary policy became obvious the past few years, the Federal Reserve will be the major economic policy maker in Washington over the next decade.
There are a lot of talking heads pushing fallacies about the Republican tax cut scam. It is time to listen to someone who understands the reality of the federal budget.
Stan Collender is not just a writer. He has been involved in the federal budget and congressional budget process throughout his entire career. In addition to being one of the few people who has served on the staffs of the House and Senate Budget Committees, he is the author of The Guide to the Federal Budget, which was published annually from 1982 to 2000 and was one of the most-assigned texts on the topic. He founded and edited Federal Budget Report, a newsletter that was published for almost two decades. He's also written weekly columns on the budget for NationalJournal.com and Roll Call and founded the Capital Gains and Games blog. In addition to his work as an executive vice president of a global communications agency, he's an adjunct professor at the McCourt School of Public Policy at Georgetown University. He has a Master of Public Policy degree from the University of California, Berkeley, and a B.A. in Politics and Psychology from NYU.
Call your politicians and make sure they understand you are educated and will let them pay if they pass this destructive bill. We will win if you all speak up.
Also published on Medium.