Voodoo economics

While speaking about the proposed Trump tax cut plan in September 2017, Treasury Secretary Steven Mnuchin told us, “Not only will this tax plan pay for itself, but it will pay down debt.” However, the Congressional Budget Office estimated that only 39 percent of the cost of the tax cuts would be recovered through 2027. Since the U.S. measures revenue as a percentage of GDP, if a tax cut actually created extra revenue, there should be an increase in this value. In FY2017, revenue was 17.0 percent GDP, but after the tax cut it decreased to 16.3 percent GDP in FY2018.

After George H.W. Bush and Bill Clinton raised taxes, revenue averaged 19.3 percent GDP during Clinton’s last four budget years when there was a budget surplus. For budget years 20192023 revenue is forecast to average 16.6 percent GDP. This loss of revenue on an economy of $21+ trillion results in a revenue loss of $567+ billion per year. As our gentle editorial page writer would ask, how many aircraft carriers would that build?

During Trump’s first budget for FY 2018, U.S. debt increased by $1.27 trillion. Debt is now forecast to increase by over $1 trillion per year for the next decade to $30+ trillion by 2028. If the Fed interest rate stays at the current 2.5 percent, yearly interest payments on debt will be about $750 billion per year. Our gentle editorial page writer could ask, how much U.S. infrastructure would that build?

The U.S. has now tried this Bushnamed “voodoo economics” three times with the same results: shortterm economic growth, reduced revenue, higher spending and ballooning national debt. The greed and irresponsibility of this generation is leaving a legacy of increasingly higher taxes and fewer benefits for our children and grandchildren.

Semper fi.

KENNETH R. WEBER

Greenbrier