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Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes.

by mhneu 8y ago

Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes. The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.

adventured 8y ago
The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region). The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years. The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
- forapurpose 8y ago
  Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.
- mhneu 8y ago
  It's a $3 trillion tax cut over 10 years. They get to $1B by finding an "offset" of $2 billion, which assumes a very optimistic growth estimate, which there was political push to develop. In particular, that offset assumes there is no bubble to pop. Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
notadoc 8y ago
> when this bubble (if it exists) bursts. This time is not different

by mhneu 8y ago

adventured 8y ago

The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region). The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years. The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.

forapurpose 8y ago
Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.
mhneu 8y ago
It's a $3 trillion tax cut over 10 years. They get to $1B by finding an "offset" of $2 billion, which assumes a very optimistic growth estimate, which there was political push to develop. In particular, that offset assumes there is no bubble to pop. Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.

notadoc 8y ago

> when this bubble (if it exists) bursts. This time is not different