Senators Pat Toomey (R., Pa.) and Bob Corker (R., Tenn.) reached a mutual agreement to set parameters for a tax overhaul.
If you think the deal will do anything about the deficit, you are mistaken.
Senate Republicans reached a deal Tuesday that would allow tax cuts over the next decade, bridging party divides over trade-offs between tax cuts and budget deficits and taking an important step toward tax-overhaul legislation.
Sens. Pat Toomey (R., Pa.) and Bob Corker (R., Tenn.), representing opposing fiscal-policy viewpoints in the Senate Budget Committee, said Tuesday that they struck the agreement, which senators said could lead to a committee vote as early as next week.
Mr. Toomey had been seeking tax cuts that might reduce revenues by as much as $2 trillion over a decade. Mr. Corker, more wary of budget deficits, had been arguing for a smaller number. The number could be up to $1.5 trillion in revenue-reducing tax cuts, but neither senator would confirm the figure in advance of a formal announcement.
Democrats accused Republicans of abandoning their claims of fiscal probity in a country with $20 trillion in debt, about $10 trillion in projected additional deficits over the next decade and the prospect, eventually, of rising interest rates.
Hypocrites All Around
Since when are Democrats concerned about deficits? Since when are Republicans unconcerned about deficits?
There is plenty of hypocrisy to spread around on this deal. But to answer the two questions:
- Democrats are only concerned about deficits when Republicans are in power.
- Republicans are only concerned about deficits when Democrats are in power.
It’s hard to say if the compromise is a step in the right direction because details are nonexistent as is typically the case.
Mike “Mish” Shedlock
More political Kabuki theater.
Since Trump promised tax cuts all he wants is that promise crossed off his ‘to do’ list. What did he have to give up to get it? Probably amnesty for one million DACA invaders.
The only way the nation’s fiscal malfeasance gets fixed is for the economic powder keg to blow sky high.
Congress is not the solution. Congress is the problem.
Whether it’s healthcare or the budget. NO ONE talks about the real issue— the SPEND.
2 Trillion over 10 years, big deal, that’s 200 billion a year. It doesn’t even come close to closing the $5-600 billion annual deficit!
Healthcare– raise premiums or raise taxes to cover the cost, but NEVER look at actually REDUCING the cost, nope, not even a bit.
Washington peeps are in their own little world squabbling about their ‘issues’ while we the people look desperately for a little ‘lube’ to reduce the pain!
Deficits and federal debt mean little. They will grow until there’s a default, in the form of higher “means testing” for services and programs, until a majority of Americans are not receiving promoted benefits.
Only when the People, via their states, stop sending non-Constitutional funds to D.C., will D.C. Learns to cut spending.
There are two* ways to create net deposits in the US private sector:
1) via deficit spending by the US Treasury**as new public debt.
2) via net lending by the banks as new private debt (“Bank loans create bank deposits”).
Now, assuming net deposit creation is good (and it is as long as there is slack in the economy) then which is better: More debt slavery to the banks OR an increase in public debt which, as has been pointed out, can command NEGATIVE yields and thus be a revenue EARNER for the US Treasury?
* If the US was a net exporter, a 3rd way would be by currency swaps by the Fed with foreign nations and sales of US goods and services to them.
**i.e. The purchase of sovereign debt by the banks DOES NOT destroy deposits but merely puts excess reserves to “work” while spending by the US Treasury DOES increase deposits in the US private sector, i.e. more money for you and me (in addition to more reserves for the banks).
(in addition to more reserves for the banks). akaother7
Assuming the Fed later buys the sovereign debt the banks have bought.
Pardon me for “Liking” my own comment – a slip of the mouse. đ
“Hypocrites All Around”
Mish, you are being kind. Crooks is what someone else might call them!
Deficits are money in somebody’s pocket. Most likely a doctor or defense contractor. Both solidly Republican constituents. Republicans are not going to cut deficits. They’d rather cut taxes on those same constituents. When you’re voting Republican, that’s what you are voting for.
+1
And ditto for taxes. Money in the pockets of the same people. Taken from the same people as well. Just by a slightly different mechanism. Which is what you vote for when you vote Democrat.
Wouldn’t be a proper progressive Dystopia if things weren’t so dystopian, after all…..
And let’s not forget that, currently, deficits provide new welfare for the rich in the form of positive yields on inherently risk-free sovereign debt.
“1. Democrats are only concerned about deficits when Republicans are in power.
2. Republicans are only concerned about deficits when Democrats are in power.”
There is no actual hypocrisy there becauses it’s all just a show. Neither are actually against deficits because their actual owners (NOT, BTW, the useful idiots who merely vote them into office) aren’t. Both major parties are just two sides of the same bought and paid for coin in a continuous, power-swapping/sharing duopoly. Dems provide the fast road to Venezuela USA, the Reps a slightly slower road.
Peter: You got it and I totally agree with both you and Mish. Look there are times when a society and a civilization in history simply go off the rails. It is our draw of the luck that we happen to live now in such a period, and I think a sensible man simply have to recognize that and not pursue idealism in his personal life. The lesson of Don Quixote by Cervantes is perhaps one of the most influential novels of the Western World set in the greatest period of Spain.
As the remnants of the “middle class” are crushed into oblivion, and with them, whatever remains of the bill of rights as well, the outcome is assured.
A “noble” experiment, (“We The People”), even if only ever put to paper and not to practice, HAS evaporated before your eyes. And the few not addicted to alcohol or prescription opiates may have the brain cells remaining to comprehend. Maybe.
“We the Oligarchy” is more like it.
“If you think the deal will do anything about the deficit, you are mistaken.”
Third time is not the charm. The game was exposed the last time republicans held congress and the White House. Republicans hounded Clinton to balance the budget, then with Bush Jr. in the White House, Cheney said Reagan proved deficits don’t matter. Obama simply ignored the republicans outcries of trillion dollar deficits, as Cheney had already stated that deficits don’t matter. The balanced budget game has lost its credibility. The real question is, why have a debt ceiling, when they always raise it anyway? If they haven’t stopped with a 20 trillion debt, they are never going to stop. There is no red line they won’t cross.
When you figure out that your mortgage payment and your taxes both keep the same people in power, you then begin to grasp the situation.
@dnabill,
What blog site were you referring me too? I did not see it in your email.