Posted on 04/09/2018 12:02:49 PM PDT by GIdget2004
The GOP's signature tax law is projected to increase the national debt by $1.9 trillion between 2018 and 2028, according to a new report by the Congressional Budget Office.
According to the report, the tax law would cost the government $2.3 trillion in revenues, but economic growth would offset that figure by about $461 billion.
At 11 years, the report covers a slightly longer time period than the usual 10-year projections, but even accounting for just the first decade, the figure remains around $1.9 trillion.
Some Republicans argued vociferously during the tax debate that tax cuts in the bill would pay for themselves, with Treasury Secretary Steve Mnuchin going so far as to say that they would ultimately reduce the national debt and deficits.
Others estimated that a dynamic score of the tax law — one that incorporated macroeconomic effects — would reduce the $1.5 trillion cost of the tax cut down to $1 trillion in added debt.
One reason the new CBO estimate may be higher is an expectation that interest rates will rise faster than previously expected, which increases the costs of servicing the debt.
In its 11-year estimate, CBO estimated that interest payments would account fo $582 billion of the $1.9 trillion total deficit increase.
(Excerpt) Read more at thehill.com ...
I believe they predicted the same (not number but huge deficits) for Reagan’s tax cuts.
B. S.
Reagan’s tax cuts doubled federal tax receipts.
What are those folks at CBO smoking?
I wonder why they didn’t write about the projected increase by year...
And how much did the CBO say Obamacare would lower the deficit?
The point of a dynamic economy is that you cannot predict with any accuracy what will happen in the future. The CBO is attempting to predict how businesses, etc will perform.
The short answer is that the CBO has NEVER been right about anything in its entire history.
So, why do people still cite it as an authority, when the entrenched bureaucrats working there could not find their a$$es with a map and both hands?
How much will depend on the aggregate preference of working versus drawing unemployment, social security, etc. There is a supply curve for drawing government payments (transfer payments in the economist's vernacular) just as there is everything else. One well known example is increasing the payment for each extra child born out of wedlock and you have a dramatic increase in illegitimacy.
Liberals don't accept this because they think emotionally, not rationally. But people in the real world (yes, even folks with IQs of 70) will think and behave rationally, for the most part.
The cough, “non-partisan” CBO. The same one that told us what a wonderful deficit reducer Obamacare would be.
The SAME CBO that was completely silent about $1.3 trillion Omnibus spending bill. NOW wants to send out a report blaming the resultant deficits on the Tax cuts?
The GOP’s signature tax law is projected to increase the national debt by $1.9 trillion between 2018 and 2028
Incorrect. A tax reduction does not add to the Governments debt. Only Government spending adds debt.
Reagan’s economists had a number in mind when they forecast the impact of their tax cuts on the Treasury’s income- they used a dynamic model in their forecast, versus the static prediction of a dollar lost for each dollar cut.
A regression analysis was run by one those economists after the Reagan years to test their prediction and they had been remarkably accurate- they predicted that for every dollar cut 60 something cents would be recouped through economic growth, and that’s what happened. Economic growth was the goal of the Reagan program, not a maximum haul for the Treasury.
People may forget that the Reagan program included $2 in budget cuts for every $1 in tax cuts. But that didn’t happen, because Speaker Tip O’Neill reneged on the deal and this resulted in exploding deficits, something Reagan greatly regretted. Since Democrats controlled the House there wasn’t much Reagan could do about it, other than scrapping his military buildup and he wasn’t going to do that.
Trump has a Republican House and a Republican Speaker. We are looking at an increase in the debt despite whatever growth occurs because Ryan and his worthless GOP stooges are not one iota better than Tip O’Neill and his Democrats. Ryan and the GOPe have no intention of doing what’s best for the country. They answer to their big donors, and to hell with the voters.
“Reagan’s tax cuts doubled federal tax receipts.”
That’s not all accountable to tax cuts. Deficit spending, the business cycle, population growth, employment participation rate, there was a lot of things that contributed to the increase in tax receipts.
Lawrence Lindsey ran a study on the Reagan program published as “The Growth Experiment” and it accounted for all that stuff. He was Reagan’s senior staff economist for tax policy.
The GOP didn't control spending when they had the chance under obama or bush as well. At the end of the day, it's on the GOP. Just as all the debt and spending has been only on the R's and D's. Yet people still elect them.
This idea that we are gonna grow the economy faster than growing .gov has been a losing cause for years. We need cuts to .gov. Now and forever.
Population expansion is an under-attributed aspect of a lot of different dynamics in federal and state spending. I agree with your thoughts on that.
Of course if you have administrations like GHWB, GW, and for the most part Obama, that population factor doesn’t enter in, because jobs simply didn’t increase like normal under those presidents. Under Reagan, they did. And they did in no small measure because of his economic policies.
Surprisingly, jobs grew nicely under Carter and Clinton too. Clinton had the benefit of a Republican majority to reign him in and institute fairly sound economic policy, but Carter didn’t. Luckily he only got one term to work his majic.
I would say that deficit spending really undercut Reagan’s successes. While the federal government tax receipts doubled under him, spending tripled during his two terms.
Part of that was attributable to rebuilding our military, but Congress spent like drunken sailors, and there wasn’t much Reagan could do about it. He needed his spending and they demanded theirs. Sometimes you have to go along to get along. It was paramount that we rebuild our military, and IMO it accomplished the goal, ending the Cold War.
A number of the same factors that existed under Reagan, exist again today. Business will take off due to Trump’s policies.
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