The numbers are in, and Trump's tax cut didn't reduce the deficit – despite his many promises

Ok let's get back to defecits. Trump never claimed they would be immediately reduced. It takes time for the full effects of the tax cuts to take hold. I realize the snowflake generation has difficulty with long term strategic thinking but maybe you will learn from this.

"The CBO report also makes clear that this faster-growing economy will offset most of the costs of the Trump tax cuts.

In a table buried in the appendix of the CBO report, it shows that, before accounting for economic growth, the tax cuts Trump signed into law late last year would cut federal revenues by $1.69 trillion from 2018-2027.

But it goes on to say that higher rate of GDP growth will produce $1.1 trillion in new revenues. In other words, 65% of the tax cuts are paid for by extra economic growth.



That faster growth will also reduce federal entitlement spending keyed to the economy — unemployment insurance, food stamps, welfare and the like — by $150 billion, the CBO says.

If you subtract that from the cost of the tax cuts, the net cost drops to $440 billion.

This is what we and other backers of the tax cuts had insisted all along. Not that tax cuts would entirely pay for themselves. But that the economic growth they generate would offset much of the costs".

https://www.investors.com/politics/...cuts-revenues-deficits-paying-for-themselves/

 

Yes he has.

The budget process is not part of GDP calculation.

I pointed out that Trump not only reduced the growth rate of the Federal Debt, but, he nearly doubled GDP in the process, even in the headwinds of the Fed raising interest rates, which most certainly DOES have an effect on the debt:

And Trump reduced the Public Debt as a percentage of GDP

You should be happy! How come good economic news is "bad news" for the Bolsheviks' Democrat Centralists?

 

Here is the thing. At the end of the day - you have revenue that comes in vs how much you spend. Just because you increase the GDP - does not mean revenue is going to increase on a

Here is the thing. At the end of the day - you have revenue that comes in vs how much you spend. Just because you increase the GDP - does not mean revenue is going to increase on a proportional basis.

So the equation as it sits is that over the last 3 fiscal years - ending in Oct 2017 - our deficit was running around 550 Billion

In Trumps first fiscal year the deficit was 779 Billion. .. an increase of 229 Billion dollars. That is the fiscal reality.

Whats more is that deficit next year is supposed to top 1 Trillion. Trump has called for a 5% across the board spending cut. We will see how that goes but, for the time being - its not good.

Raising the GDP by massive credit card spending is not a recipe for success. Reagan raised the GDP in the same way Trump is doing and we nearly sunk the ship.

 

What part of "Trumps fiscal year started in Oct 2017" do you not understand.

GDP is not directly related to debt/deficit - the topic.

 

Only an idiot believes that a huge tax cut will reduce the deficit in the world*s superpower economy. The government gets money from taxes and borrowing. When taxes go down the borrowing increases and so does the deficit. Repubs have been selling that BS about lower taxes since the Civil War.

 

What part of "Caveats" did you miss. They made an estimation, and it wasn't what it ended up being. Nobody predicted the extent of what was to come.

You got a rebuilding economy. The house collapsed. They built the foundation for the rebuild. The
upward trajectory started and continues today.

 

You are still avoiding the time frame here that this will take to fully work.

"In a table buried in the appendix of the CBO report, it shows that, before accounting for economic growth, the tax cuts Trump signed into law late last year would cut federal revenues by $1.69 trillion from 2018-2027."

 

Yes they DID, in their economic report used to sell the stimulus to Congress, they said unemployment would hit 8%, high enough at that, but instead it shot 25% higher to 10% and stayed over 8% for 4 years while the LFPR tanked else it would have looked even worse.

Economist Who Said Unemployment Wouldn’t Top 8% Now Says It Won’t Go Below 8% Before 2012 Ends

By Fred Lucas | August 16, 2011 | 5:00 AM EDT


Washington (CNSNews.com) – The White House economic adviser who said in 2009 that unemployment would not go above 8 percent with the help of the economic stimulus law, now says he was wrong and that he does not think unemployment will even go below 8 percent before the end of 2012.

https://www.cnsnews.com/news/articl...-top-8-now-says-it-won-t-go-below-8-2012-ends

"First, Obama's economic advisers promised the stimulus would keep the unemployment rate below 8 percent. In 2012, the unemployment rate was supposed to fall below 6 percent. The prediction was not meant to be taken lightly. In a January 2009 radio address, Obama announced he was releasing a report based on "rigorous analysis" that charted unemployment through 2013 so "the American people can see exactly what this plan will mean for their families."
https://www.usnews.com/opinion/arti...t-failures-from-president-obamas-stimulus-law

What they did failed and nothing else can be said about it. They passed nothing after that to get us into a full recovery and instead went on a regulation and EO binge while the deficit remained over $1,000B. It was business and the markets that barely kept our heads above water for the next 4 years until the Republicans slowly started taking back over and now we once again have a Republican vibrant and growing economy with some of the best employment numbers in our history....

 

That is only 169 Billion per year. Trump going on a spending spree accounts for the rest.

And I did not avoid the time frame - in fact I addressed it directly in my comment about Trump doing the same thing as Reagan did. 10 years later we were in a debt crisis.

Under Reagan the deficit did not disappear despite a big increases in revenue. Don't underestimate the ability of the Gov't to spend faster than the money is coming in. The difference is that Reagan was helped by the baby boomers moving into their high spending years. (on the contrary Trump is in at a time when the boomers are going into their low spending years). Remember that consumer spending is the majority of the economy. Tax breaks to corporations and the wealthy elite do not help the economy that much.

By the time Clinton made it to the white house the interest on our debt had gone above 25% of income. This is a big deal. At 30% red lights and sirens go off at the IMF and they issue warnings - the ship is taking on water faster than it can be bailed out and if something is not done soon the ship will sink.

It is not that Clinton and Republican congress wanted to reign in spending - they had to. We also lucked out due to a "white swan" event.
The internet/tech/computer revolution and subsequent bubble yielded a huge increase in revenue.

Though a mixture of austerity and luck - we dodged a bullet.

We now have 21.5 Trillion in debt. In 2000 the interest on our debt was something like 420 Billion/year on 6 Trillion in debt. With a debt of 20 Trillion our annual interest was 450 Billion/year.

How can that be you should be asking. Since the debt was more than triple the interest should be higher. The reason for this is back in Clinton's time the ave interest on our debt was 7% or more. We managed to get the ave interest rate down to 2.25%.

While this is good on the surface - messing with the "invisible hand" has its price. The Fed has accumulated 4.5 Trillion in US debt - decreasing supply which lowers interest rates.

The other thing we did was to increase the amount of debt purchased at short term (2yr, 5yr, 10yr) as opposed to the traditional 30yr. The problem with a 2 yr is that it has to be refloated in 2 years.

Look at this chart (click on 5 yr) and be horrified https://www.cnbc.com/quotes/?symbol=US2Y

Note that in 2014 you could have floated 2yr debt at less than 0.4% - almost free money. The problem is that in 2016 you had to refloat at a much higher rate and today its 2.9%. ... a 750% increase in the interest you will pay .. an increase of 2.5%

Now this is unrealistic on a short term basis but, to give you an idea imagine if the ave interest on our entire debt increased by 2.5%.

21.5 Trillion x 2.5% = 537 Billion per year increase.

Interest on our debt is not 520 Billion/year - rapidly increasing due to interest rates moving higher.

Now we are on a path to 1 Trillion dollar deficits once again. So not only do we have to float that debt but also the fed is trying to reduce its balance sheet and we also have all the debt that comes due every year.

At the same time demand for US debt is weakening. This combination of increased supply and decreased demand (the invisible hand at work) is what is causing the huge upward pressure on interest rates.

Increasing deficits in a rising interest rate environment is the pinnacle of fiscal irresponsibility - and that is exactly what Trump and Red Congress are doing.

 

Ted Cruz said GOP tax cut led to higher revenues. Did it?

 

And yet, the rate of increase of the national debt is lower than it has been since around 1997..

https://www.macrotrends.net/2496/national-debt-growth-by-year

 

And yet that post is a way to avoid the fact that trump lied about the tax cut reducing the deficit.

 

It takes time for revenues to come pouring in, but you're like a child who demands instant gratification and appeasement.

 

No. It does not. The US Government collects revenue every month. We are perfectly capable of comparing how much the government collected in each month as compared to that same month from previous months.

You are like a child who wants to stick up for his daddy.

 

??? I just showed that the rate of increase is lower than the prior administration by nearly 2% points. That is a reduction.

 

"The rate of increase is lower...that is a reduction."

 

Where did you guys go to school? You should demand a refund.
A reduction doesn't occur until the slope of the rate of increase becomes negative.

 

/facepalm

If you have a bucket of water that has 3 holes in it. If you plug 1 hole, you have reduced the amount of water leaking out by 1/3. That is a reduction of output and you have slowed the amount of water leaking out.

If you need pictures, please let me know.

 

I understood what you were saying, you were simply wrong.
If you are driving north do you start going south if you slow down?
Maybe the problem is vocabulary. Do you know the definition of reduction?

 

Your comparison is EXTREMELY flawed. If I'm driving North at 85 MPH and I REDUCE my speed to 55 MPH, that is a reduction of my rate of speed. You do not have to go negative to have a reduction and your premise is ridiculous if you think so. That is liberal math or more accurately, common core math.

re·duc·tion
/rəˈdəkSH(ə)n/
noun

1. 1.
   the action or fact of making a specified thing smaller or less in amount, degree, or size.
   "talks on arms reduction"
   synonyms: cutback, cut, downsizing, scaling down, trimming, pruning, axing, chopping More
2. 2.
   a thing that is made smaller or less in size or amount, in particular.

When you reduce the rate of increase, that is a reduction. Even if your debt is increasing, if you reduce the amount of increase, it is a reduction. Analytics 101.

 

Again, I know what you are saying. I guess the only question is is your deception intentional? Are you taking the trump defense?

 

Since the topic of this thread is deficit and not the rate of change of the deficit your position is inane. If the rate of change is positive then the deficit grows. This is trivial stuff.
So are you intentionally lying or are you not smart enough to understand that you are misleading(the trump defense)?

 

Your analogy gives the incorrect impression that the bucket is not alread full of debt and over flowing.

Trump did not plug any holes. If anything Trump reduced the flow into the full bucket.

The inflow into the bucket still is to great for the bucket to handle the amount of debt flowing in. ...your 3 drain holes represent tax revenues.

Even Trump knows he needs an economy that has 5% GDP constant growth to produce the tax revenues to pay for his massive tax cuts...and massive spending.

3.5% is not cutting it.

 

I stated a fact, not lying at all at which I provided subsequent proof of my claim. This isn't a tactic nor deception. This is analytics that every major corporation (even smaller LLC's) use to define their forecast P&L and to establish benchmarks for growth. Since you continue to provide non-sequitur arguments and apparently lack understanding of analytics, I will assume this debate has hit it's precipice and we are merely going round and round. Good day and I wish you the best!

 

So disingenuousness it is, thanks for showing your true character.
OP:
The numbers are in, and Trump's tax cut didn't reduce the deficit
Bearack: Trump's statement was accurate because the rate of increase was down.

pfft. gtfooh