We’ve Heard This Song And Dance Before…

Treasury Secretary Steven Mnuchin said economic growth resulting from the proposed tax cuts would be so extreme that it would come close to recouping all of the lost revenue from the dramatic rate reductions.

Here they go again. Remember the Reagan era when a rising tide lifts all boats was the sell and trickle down economics,  aka Reaganomics was the official economic policy of the government? Well, we all know today just who really benefitted and how it really worked out for the middle class don’t we? Economic stagnation for most of us with wealth flowing to the very top.

Excerpt from The Washington Post:

The Trump administration plans to rely on controversial assumptions about economic growth to offset steep cuts to business and individual tax rates, a chief architect of the plan said Thursday.

Treasury Secretary Steven Mnuchin said the economic growth that would result from the proposed tax cuts would be so extreme – close to $2 trillion over 10 years – that it would come close to recouping all of the lost revenue from the dramatic rate reductions. Some other new revenue would come from eliminating certain tax breaks, although he would not specify which ones.

“The plan will pay for itself with growth,” Mnuchin said at an event hosted by the Institute of International Finance.

Assuming economic growth based on changes to the tax code is known as “dynamic scoring,” and many conservatives embrace its use when arguing for lower rates. But estimating the future economic impact of tax cuts is very difficult to do, as it requires policy makers to rely on economic forecasts that are often imprecise.

And even if the White House has rosy estimates about the economic impact of the tax cuts, the administration could run into trouble as any plan moves through Congress. That’s because Congress relies on tax analyses performed by the Congressional Budget Office and the Joint Committee on Taxation, which tend to have a more restrained view on the macroeconomic effect of tax cuts.

“We have some evidence about how big these effects can be,” said Donald Marron, a former CBO official who is director of economic policy initiatives at the Urban Institute. “They are not zero, but they are modest.”

President Trump believes the tax code is too complicated and tax rates are too high, and he has made overhauling the tax code one of his top priorities. But simply cutting taxes — lowering the rates that businesses pay and that individuals pay — is difficult for lawmakers because of congressional budget rules. Most Democrats will not support a tax plan that simply cuts tax rates, and Republicans have a narrow 52-to- 48 advantage in the Senate. (continue reading)

While the tax code is arguably too complicated, it is, cutting taxes by lowering rates on business and individuals is simply not going to achieve the long-term results Trump believes it will. Rather history has shown it will result in greater wealth concentration at the pinnacle of the economic pyramid and eventual stagnation for the middle class.

 

Trump’s Learning Curve, and, Opportunity…

The Atlantic has an excellent article on just why Trump may be the guy to ultimately explain the immense complexities the President of the United States faces daily. Explaining that domestic and international issues facing the nation are indeed not as simple or easily fixed as he said they would be on the campaign trail.

Trump is arguably the most ill-informed and ill-equipped person to ever assume the executive reins of our government.  He is very much like the average American who is too busy earning a living and raising a family to delve into the complexities of governing an expansive nation of almost 350 millions souls. He promised much and said it would be easy, he is finding out it is very hard and complicated. His learning curve is steep and the climb hard.

As pointed out in detail in The Atlantic  this is the very reason why Trump as he goes through his on the job training has an opportunity to take his supporters with him. Explaining just how complicated things really are.

Here’s an excerpt from the article followed by a link to the rest.

Let the betting pools begin: What will be the next policy issue that Donald Trump suddenly discovers is way more complicated than “anyone” ever imagined?

Already, the aggressively policy-ignorant president has marveled that dealing with touchy issues such as North Korea, China, the Ex-Im bank, Syria, and health care, requires more than trash talk and an itchy Twitter finger. And, while he has yet to break the bad news to the dying coal towns that backed him, Trump has been meeting with energy execs, some of whom have had to gently explain that, when it comes to saving the industry, there’s not all that much he can do. Because—altogether now!—it’s complicated.

As it turns out, no matter how much reality TV experience one brings to the table, one cannot simply snap one’s fingers and instantly solve the nation’s most vexing problems.

Who knew?

It’s hard not to be unnerved by the level of on-the-job training Trump requires. (N.B.: For the exceedingly anxious, Amazon offers a cornucopia of in-case-of-apocalypse survival packs.) It’s even harder to resist sneering at his ongoing voyage of presidential discovery. Just think of the unholy abuse Trump himself would be heaping on any other politician so glaringly out of his depth. Brutal.

That said, what if some good could come from Trump’s cluelessness? What if, as he slammed head first into the real-world complexity of the problems he so blithely vowed to fix, he tried to bring his voters along with him in his education—at least part of the way?

The idea sounds crazy, I know. Having based his entire candidacy on promising the scared, alienated, fed-up (white) masses that he could easily make them winners again, Trump may seem an unlikely choice to now explain that things are not as simple as he (or they) initially believed. (For instance, China cannot simply jerk North Korea into line like a naughty puppy.)

But it’s precisely because of his anti-establishment, know-nothing persona that Trump may well be uniquely suited to the delivering such lessons of politics and government.

While the political class likes to mock Trump’s policy and governing ignorance, it’s not as though he’s more ill-informed than the average American. Indeed, his bashing of pointy-headed elites, wonks, and the entire notion of expertise was key to his appeal.

Voters don’t like to be talked down to (especially those already feeling disrespected). Many, many Americans were put off by President Obama’s cerebral, too-cool-for-school manner. It made him seem remote, unrelatable, patronizing. Similarly, precious few hearts raced when Hillary Clinton babbled on about detailed policy plans in that wonky, pedantic way of hers. (Uppity woman!)

This goes beyond partisan sorting. Recall how well the wonkier GOP candidates fared on the presidential trail last year. (Poor Jeb!) Or look at Paul Ryan. The more the House speaker labors to explain the nuances of health care reform or tax reform or budget negotiations, the less that even his own conference wants to hear from him. As Senator Tom Cotton snarked after Ryan tried to sell Republicans in the upper-chamber on a complex border-adjustment tax: “Some ideas are so stupid only an intellectual could believe them.”

In politics, it does not pay to come across as a smarty pants.

SOURCE for more.