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Thursday, October 26, 2017

Nonsense On The Budget

Here's the news:  the House passed the federal budget blueprint today with every Democrat voting against it.

Here's the media spin on that vote:

1.  Republicans abandoned a balanced budget because of Trump's "boast" of a "massive tax cut".
2.  Democrats opposed the budget because of the deficit spending it included.
3.  Republicans say that tax cuts will boost the economy, but "experts" warn that this will not happen.
4.  The purpose of the budget busting tax cuts is to give cash back to rich people and richer corporations.

Here's the reality:
1.  The budget does not spend even one cent of federal money.  Instead it is a blueprint of proposed spending.  Nothing will be spend unless and until Congress authorizes the spending and appropriates the money.  Nothing in the budget affects how large or how small the actual federal spending will be.
2.  Passing the budget is necessary for Senate Republicans to head off a Democrat filibuster of any tax reform effort.  The budget lets the senate use a procedure called reconciliation which mandates a vote with limited debate.  In short, that means passing the tax bill with a majority rather than with 60 or more votes.
3.  The idea of tax reform is not a "boast" by the President, but rather one of the core principles of the GOP.  It is also a major promise from President Trump during the campaign as well as a major promise for nearly every GOP member of Congress.
4. In modern times, Democrats have never opposed any spending because it might lead to a deficit.  Indeed, while Obama was in office the level of deficit spending rose to previously unknown heights.  Nothing in the budget or the tax reform measures would even come close to the deficit levels foisted on America by Obama and the Democrats.
5.  The so called "experts" who warn that tax reform won't boost the economy are frauds.  When rates were cut by Kennedy, Reagan and Bush, the economy responded with much quicker growth.  There is no instance in the last hundred years of a tax cut ever failing to boost economic growth.  That means that these supposed "experts" are just hacks trying to achieve a political end, rather than real experts in economics.
6.  Tax cuts for business are not gifts to rich people.  If America's private sector has more money to invest, the resulting extra growth will mean millions of additional jobs, higher wages for those employed and reduced government spending for welfare. 
7.  Tax reductions for individuals will most likely mean some additional cash for the wealthy.  That's because they are the ones who pay most of the taxes.  Only about half of American households actually pay income taxes.  The top 25% of households in income pay over 90% of income taxes.  If taxes are reduced, the benefit will go to those who pay taxes in the first place.  That's no surprise.

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