Forbes: GOP Tax Bill Is The End Of All Economic Sanity In Washington

[WilliamSeger]

https://www.forbes.com/sites/stanco...l-economic-sanity-in-washington/#774a835f77ef

... If it's enacted, 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.

The GOP's insanity is compounded by its moving ahead without having any idea of what this policy will actually do to the economy. The debates in the Ways and Means and Senate Finance Committees and on the House floor all took place before the Congressional Budget Office's analysis and, if it really exists, the constantly-promised-but-never-seen report from the Treasury on the economics of this tax bill.

Of course, most of the Republican Congressmen are not actually insane; they know full well who this bill helps -- their donors, who will see fantastic returns on their investment -- and they simply don't care who it hurts. But they know we do care, so they are simply lying through their teeth about what the bill does -- lying so blatant and so destructive to honest debate that I can't think of any real precedent in my 5 decades of watching Congressional maneuvering. It surpasses the previous record so recently set by their lies about Obamacare "repeal and replace," but only by a little.

How can any intellectually honest Republican not be ashamed of these bait-and-switch con jobs?

2018 needs to be the year that this version of the GOP dies an ignoble death, and good riddance.

 

[ponderingturtle]

Of course a liberal rag like forbes would say that.

 

[BobTheCoward]

It seems the point of the article is that this tax bill hurts their donors through inflation.

 

[The Don]

It seems the point of the article is that this tax bill hurts their donors through inflation.

Then I think you have misunderstood the article.

My reading of the article is that:

• Given the current state of the US economy (steady if unspectacular growth, low unemployment) there is no need for such a stimulus
• That in any case, this would not be the way to do it
• By doing this now, the GOP is denying themselves one of the necessary levers to deal with future downturns
• Even the timetable for this legislation is wrong and is targeted at the needs of the policy makers and not the needs of the US economy

 

[BobTheCoward]

Then I think you have misunderstood the article.

My reading of the article is that:

• Given the current state of the US economy (steady if unspectacular growth, low unemployment) there is no need for such a stimulus
• That in any case, this would not be the way to do it
• By doing this now, the GOP is denying themselves one of the necessary levers to deal with future downturns
• Even the timetable for this legislation is wrong and is targeted at the needs of the policy makers and not the needs of the US economy

Their donors would hate a bad downturn, also.

 

[tyr_13]

Their donors would hate a bad downturn, also.

But they don't know that they would.

They think that they're each special, gifted, harder-working, and worth more than other people and would still come out ahead. They rationalize this foolish self-centered idiocy with rationalizations such as thinking it's the only way to keep them and others strong, that there is no other way, that it makes the weak stronger by making them fight for it (by having the price of failure be catastrophic and the rewards stratospheric), that the 'losers' deserve it and after all, they are not losers. Many just want to hurt the 'losers'.

Many have been buying their own dog food for too many years to see it. Otherwise rational people think that they'd be fine even with massive civil unrest. Even the mechanism so beloved by libertarians of 'rational self-interest' fails hard when the group is not being rational. They would be hurt by a downturn, that should be enough to make them support a better policy, but not enough of them believe they would be hurt. They're 'special'.

 

[The Don]

Their donors would hate a bad downturn, also.

Which is it, downturn or inflation

In any case, you claimed that:

It seems the point of the article is that this tax bill hurts their donors through inflation.

I disagree, and think that you have misunderstood the article if you think that's the sole, or even the main, point of the article.

If you meant that it's one of many points made in the article then I think that your comment is very poorly worded.

 

[lomiller]

It probably wouldn’t result in inflation. The Fed largely controls that with monetary policy. It would however force the Fed towards tighter monetary policy that would raise interest rates and wash away any of the hoped for economic growth.

 

[varwoche]

One danger of having a bumbling imbecile of epic proportions as POTUS is the normalization of comparatively normal, fact-challenged, Rand-worshiping ideologues such as Ryan.

 

[logger]

Of course, most of the Republican Congressmen are not actually insane; they know full well who this bill helps -- their donors, who will see fantastic returns on their investment -- and they simply don't care who it hurts. But they know we do care, so they are simply lying through their teeth about what the bill does -- lying so blatant and so destructive to honest debate that I can't think of any real precedent in my 5 decades of watching Congressional maneuvering. It surpasses the previous record so recently set by their lies about Obamacare "repeal and replace," but only by a little.

So the article discusses the economic disaster this bill would create by inflation? Is this your side admitting what tax cuts do but ignoring the revenue coming in?

How can any intellectually honest Republican not be ashamed of these bait-and-switch con jobs?

Ashamed? To get more of our money b@ck from wasteful disgusting government. And by the way, I don’t think they should do it either. Maybe do something for corporations bu5 we’re way too deep in debt. We need to cut spending!

2018 needs to be the year that this version of the GOP dies an ignoble death, and good riddance.

Yes because we want to go back to the horrendous Obama economy.

Electing Dems instead of republicans goes from stupid to insane!

 

[eeyore1954]

Of course a liberal rag like Forbes would say that.

I know you are being facetious but the "liberal rag" Forbes allows contributors of many different views to post articles. Too bad more sources don't allow varying viewpoints.

 

[ServiceSoon]

Then I think you have misunderstood the article.

My reading of the article is that:

• 
  [*]Given the current state of the US economy (steady if unspectacular growth, low unemployment) there is no need for such a stimulus
• That in any case, this would not be the way to do it
• By doing this now, the GOP is denying themselves one of the necessary levers to deal with future downturns
• Even the timetable for this legislation is wrong and is targeted at the needs of the policy makers and not the needs of the US economy

A different contributor at Forbes interprets those same economic conditions as indicators of a recession. I don't know which author at Forbes to believe.

 

[ponderingturtle]

A different contributor at Forbes interprets those same economic conditions as indicators of a recession. I don't know which author at Forbes to believe.

That isn't actually arguing that the tax plan would help though.

 

[lomiller]

So the article discusses the economic disaster this bill would create by inflation? Is this your side admitting what tax cuts do but ignoring the revenue coming in?

“our side” has long understood that fiscal stimulus of any kind puts upwards pressure on inflation and interest rates. The real question is when such upward pressure is desirable and when it is not. Under current economic conditions it is not, so it would create a massive amount of new debt for doing something actively harmful to the US economy. The ultimate lose-lose.

We need to cut spending!

2/3 of US government spending is Mandatory and can't be cut without massive cuts to programs that heavily benefit a block of voters (Seniors) that lean heavily Republican. Significant cuts to Mandatory spending would require new laws be enacted to strip this group of existing benefits so we can surmise that no such cuts will occur under Republican leadership.

2/3 of discretionary spending go to Defence and Security, areas Republicans ant to increase spending.

Much of the remaining 8%-10% of the US budget is still on essential services like highways, the court system, and also cannot reasonably be cut.

What's left after that almost all shows a positive ROI, so in the long run cuts would cost more than the programs themselves.

The end result is that Republican leadership would almost certainly increase spending in the long term over and above what would be seen under Democrats. Combined with large decreases in revenue being proposed the inevitable outcome is a massive increase in US debt.

 

[ponderingturtle]

On the plus side this tax bill will solidly destroy what is left of science in our universities so that is a win for conservatives. No one is going to be able to afford to get advanced degrees in science anymore.

 

[CORed]

Of course a liberal rag like forbes would say that.

It seems Forbes hasn't gotten the memo: Deficits and increased national debt are only bad when a Democrat is the president. Most likely we won't really see the deficit ramp up until after a Democrat has replaced Donald Trump, at which point the deficit will be said Democrat's fault.

 

[applecorped]

Auntie Em, it's a twister!

 

[The Don]

A different contributor at Forbes interprets those same economic conditions as indicators of a recession. I don't know which author at Forbes to believe.

Indicators of a possible future recession according to the linked article.

Removing one of the levers to address a future recession whilst not in one sounds like a bad idea

 

[Hlafordlaes]

“our side” has long understood that fiscal stimulus of any kind puts upwards pressure on inflation and interest rates. The real question is when such upward pressure is desirable and when it is not. Under current economic conditions it is not, so it would create a massive amount of new debt for doing something actively harmful to the US economy. The ultimate lose-lose.

2/3 of US government spending is Mandatory and can't be cut without massive cuts to programs that heavily benefit a block of voters (Seniors) that lean heavily Republican. Significant cuts to Mandatory spending would require new laws be enacted to strip this group of existing benefits so we can surmise that no such cuts will occur under Republican leadership.

2/3 of discretionary spending go to Defence and Security, areas Republicans ant to increase spending.

Much of the remaining 8%-10% of the US budget is still on essential services like highways, the court system, and also cannot reasonably be cut.

What's left after that almost all shows a positive ROI, so in the long run cuts would cost more than the programs themselves.

The end result is that Republican leadership would almost certainly increase spending in the long term over and above what would be seen under Democrats. Combined with large decreases in revenue being proposed the inevitable outcome is a massive increase in US debt.

Well said.

 

[eeyore1954]

On the plus side this tax bill will solidly destroy what is left of science in our universities so that is a win for conservatives. No one is going to be able to afford to get advanced degrees in science anymore.

Here is a different opinion from Forbes.
https://www.forbes.com/sites/presto...wont-destroy-graduate-education/#2d4917074876



What % of graduate students receive stipend and tuition assistance? I couldn't find the answer.
But I do know when I got my masters degree I had to pay my tuition plus I had to pay taxes on the income I earned from a non university job that I used to pay my tuition.