Astounding fiscal irresponsibility
The Congressional Republicans have rushed drastic tax cuts through Congress with astounding speed — and irresponsibility. The final bill passed narrowly by the GOP majority in the Senate, flung together in the manner of a midnight hash made from leftovers and whatever other miscellaneous items were available.
The Republican bills passed by the Senate and the House must now be reconciled, but the main results are clear. Enormous tax cuts go to upperincome taxpayers and corporations. Cuts for middle income and working people are present but temporary. In other words, regular people are being conned.
There is also an aura of malice, even vindictiveness, to elements of this terrible and terribly partisan Republican initiative. Unable to repeal the Affordable Care Act, generally referred to as Obamacare, the Republicans quietly added unrelated provisions removing the penalty for not purchasing insurance.
The House version will tax student scholarships and tuition waivers, and deductions for student loans end. In effect, generally low-income young people would face the same tax burden as higher-income people, without the actual income. This meanness may not survive legislative reconciliation.
Most importantly, all realistic and reasonable analyses of the impacts indicate that our national deficit and debt will greatly increase. Local governments also will suffer. Long-term federal debt obligations are already worryingly high and guaranteed to grow. Republican brush-off denials again conjure imagery of condescending con artists.
Deficits are not inherently bad, or inevitable. Classic, classy conservative columnist William Safire observed early in our new century that government deficits were developing “as far as the eye can see,” as spending escalated and taxes were cut by the new administration of President George W. Bush.
The influential columnist added that the growing deficits recalled the 1980s when Reagan tax cuts and substantial defense spending boosts led mainstream leaders in business, education and other professions publicly to sound the alarm about government gone wild.
However, Safire then added that during the 1990s we were projecting federal fiscal surpluses “as far as the eye can see.” That reflected both the cumulative positive effects of powerful long-term economic growth, Republican tax reform that did not increase deficits, and Clinton administration fiscal prudence.
Safire concluded, “The eye can’t see very far.” He was right.
However, we had recently emerged from the prosperous 1990s, not a severe financial recession. In addition, Wild Bill Clinton’s destructive personal behavior distracted from the much more important fact that President William Jefferson Clinton had engaged in remarkable fiscal discipline and prudence.
Humorist Will Rogers became popular during the Great Depression for his homespun style, which was a self-conscious contrast with wealthy and powerful interests.
Inspired by Will Rogers, here are three down-to-earth points.
First, as a worker, take pride. The United States — you and me — has the most productive and largest economy in the world.
Second, as a citizen, be active and alert. Government reforms reflect pressures, currently from high-income interests. Our election votes are more important than ever.
Third, as an investor, do your homework. A good guide is “Security Analysis” by Benjamin Graham and David Dodd, first published in 1934 during the Great Depression, and revised regularly since.
If current Republicans remain in power, we will need all we can save.