Breaking The Bank
By: Joshua Z. Seaborn II
The recent report sent out by the United States Treasury Department is an Economic Blunder.
“The latest Treasury ‘analysis’ is nothing more than one page of fake math,” said Senate Minority Leader Charles Schumer (D-N.Y.) in a statement.
The first major flaw in the Treasury’s prediction is the claim of an annual 2.9 percent growth of Gross Domestic Product (GDP) for ten years, compared to the 2.2 percent rate by Treasury’s Office of Tax Policy original prediction.
The change in predictions is accredited to a change in perception. The 2.2 percent is based on “current law,” meaning this will be the percent if no changes are made to current law. The 2.9 percent is based on “Current Polices,” which is projected polices that are still in the works, stuck in the mud, not thought of yet, presented, yet will never happen and still in the realm of disillusion.
“Treasury expects approximately half of this 0.7% increase in growth to come from changes to corporate taxation,” the report said. “We expect the other half to come from changes to pass-through taxation and individual tax reform, as well as from a combination of regulatory reform, infrastructure development, and welfare reform as proposed in the Administration’s Fiscal Year 2018 budget.”
Bob Bryan from Business Insider wrote, “The report does not back up the Trump administration claim that the tax bill would ‘pay for itself.’ Rather, it says the assumed growth rate from a budget that includes boosts from a yet-to-be-released infrastructure package and other policy changes would be enough to make up the lost revenue from the tax bill.”
Overall the report stated the Senate tax bill would generate $1.8 trillion in additional federal revenue over the next 10 years, more than offsetting the legislation’s estimated $1.5-trillion cost. The Treasury department assumes the economy would be improved with a cocktail combination of regulatory reform, infrastructure development and welfare reform.
“An analysis released by Congress’s official scorekeeper, the Joint Committee on Taxation, previously found that the Senate tax bill would generate enough economic growth to lower its $1.4 trillion revenue cost by only about $458 billion over a decade,” wrote Saleha Mohsin from Bloomberg Politics.
“This document is a tacit admission that Treasury’s career tax experts have no analysis showing the tax plan pays for itself — but written in a way to confuse people who can’t or won’t read between the lines,” tweeted Jacob Leibenluft, a senior adviser at the left-leaning Center on Budget and Policy Priorities and former deputy director of the National Economic Council.
What the report actually is stating is that the U.S. economy would increase from 2.2 percent annual growth to 2.9 percent annual growth every year for a decade. Currently the Congressional Budget Office is projecting just 1.9 percent growth per year, wrote Heather Long from the Washington Post.
The current Senate tax plan cutting the corporate rate to 20 percent, from its current 35 percent. Treasury says that half of the GDP growth will come from these colossal cuts.
The Joint Committee on Taxation said the Senate tax bill would add about $1 trillion to the deficit over a decade and the non-partisan Urban-Brookings Tax Policy Center Policy Center said the day it was released that the Senate plan would increase GDP by 0.7 percent in 2018 before falling off in ensuing years.
Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, tweeted “no one should believe this study.”
Schumer said, “It’s clear the White House and Republicans are grasping at straws to prove the unprovable and garner votes for a bill that nearly every single independent analysis has concluded will blow up the deficit and generate almost no additional economic activity to make up for it.”
The domestic propaganda war machine has begun its siege on the public using tactics of disinformation with government resources. Most believe that all administrations do this; the current one is just very poor at concealing it. With such minimal confirmations of appointees and an intentional dysfunctional inner circle, it comes as no surprise.
There has never been a president that I have questioned motives to be something other than the betterment of the American people, until President Donald Trump took office. Each move the administration makes paints a picture of a deceitful, dysfunctional, divided and authoritarian regime.
* Disclaimer: Counter-Errorism is a satirical opinion column. *