Study: Trump/GOP Tax Cuts Did Nothing But Give Rich People Money

Some of us never believed that the Trump/GOP tax cuts, a/k/a massive gift to the extremely wealthy, would (i) not cause the federal deficit to balloon, and (ii) result in business investment and higher employee wages.  Now, a study by the Congressional Research Service has confirmed what we naysayers were saying all along: the tax cuts did nothing but give huge amounts of money to the already rich.  Business investment did not increase, employee wages did not surge, and the federal budget deficit exploded. Yet, Trump and Republicans continue to lie and tell their gullible - may we say stupid - base to the contrary.  Meanwhile the rich are enjoying what they always knew was the end goal: lots of money shifted to their pockets.  A piece in New York Magazine looks at the study findings:

The biggest effect of the Trump tax cuts is obvious: People who own businesses and other sources of concentrated wealth will have a lot more money, and the federal budget will have less. But the advocates of the tax cuts insisted it wasn’t about letting the makers keep their hard-earned money rather than handing it over to the takers. It was about incentivizing business to repatriate funds and ramp up its investments, thereby increasing growth and wages.

The Congressional Research Service, a kind of in-house think tank for Congress, has a new paper analyzing the effects of the Trump tax cuts. It finds that none of those secondary effects have materialized. Growth has not increased above the pre-tax-cut trend. Neither have wages. After a brief and much smaller than expected bump, repatriated corporate cash from abroad has leveled off.

If the Trump tax cut had encouraged new business investment, it might take years for the new investment to bear fruit. But the study looks directly at business investment and finds … nothing . . . Supporters of the Trump tax cuts insisted not only that they would promote growth, but that they would promote so much growth the measure would pay for itself. Even moderates like Susan Collins repeated assurances by the party’s pseudo-economists that the plan would not increase the deficit. So far, the growth feedback from the tax cuts has made up about 5 percent of the plan’s revenue loss, a mere 95 percent shy of the predictions. . . . the paper finds no widespread increase in bonuses or worker compensation.

If their true primary goal was to increase business investment, then the complete failure of a highly expensive program to achieve its stated goal would lead them to question their support. Why not cancel the Trump tax cuts and use the couple trillion dollars in lost revenue to fund a more effective growth-promoting policy?

So far, the number of Republicans reassessing their support for the Trump tax cuts is, give or take, zero. What this suggests is that the alleged growth-incentivizing secondary effects of the plan were rationales, and the primary effect — giving business owners more money — was the hidden main goal all along.

Republican Candidates Are Falling Flat in In Trump Country

In politics, one should never allow them-self to feel over confident.  It is always essential to act as if one is behind and must turn out every possible voter so that one either wins by a small margin or, better yet, wins by a landslide,  That said, things appear to be looking up for Democrats in the Mid-West where much of Donald Trump's promised economic resurgence is falling flat.   The result is that Republican candidates are likewise filling flat in midterm election contests.  Indeed, the Des Moines Register has endorsed Democrat candidates complaining" the GOP has failed to govern,"  Here are highlights from that papers argument that Republicans need to be sent into retirement:

When Republicans achieved the trifecta in 2016, winning the presidency as well as holding the House and Senate, it seemed the country was poised to move beyond the GOP-engineered partisan gridlock that had characterized much of the previous six years.Not so much, as it turned out. The Republican majority in Congress tried and failed to dismantle the Affordable Care Act without offering a plan of their own that a majority of their own members — let alone a majority of the American people — could support.  Instead, they have allowed the system to become increasingly unstable, leading to a lack of competition and rising premiums.

Republicans in Congress have not only failed at comprehensive immigration reform, but their action allowed protection to expire on young, undocumented Americans brought here as children. They haven’t even fully funded President Trump’s border wall. They stood by as the administration tried to bar Muslims from certain countries from entering the United States. They looked the other way as the administration shocked and dismayed the nation by separating young children from their parents at the border, holding them in detention and losing track of some of the kids.

Republicans promised fiscal responsibility, yet they have punted on putting the nation back on sound financial footing. Their one major legislative success, the 2017 tax cut, is projected to add $1.9 trillion to the debt. This, after Republicans howled endlessly about the comparatively meager deficits created during the Obama administration. The Congressional Budget Office said in August that these tax cuts and spending increases would become “unsustainable” if extended. But the House GOP, including Iowa’s three Republican representatives, voted last month for another $3.8 trillion in tax cuts.

In becoming the party of Trump, the Republicans have forsaken traditional conservatism and given voters no rational alternative to the Democrats. The party needs to be voted out of power and spend a few years becoming again the party of Lincoln, not the party of Trump.

Nothing short of a change in party leadership in Congress will move this country forward. That’s why we’re recommending that Iowa voters send home Reps. Rod Blum, David Young and Steve King and return Rep. Dave Loebsack to the House.

Thankfully, Republican problems extend far beyond Iowa and, as in Iowa, Trump appears to be a major obstacle for many voters.  These highlights from the Washington Post looks at the situation:

Polling shows [GOP Congressman Lou Barletta] well behind Democratic Sen. Robert P. Casey Jr. Indeed, it has become increasingly hard for Republicans to remain optimistic about the chances for him and other GOP candidates across the industrial Midwest.

Republicans running for governor or senator in Wisconsin, Michigan, Ohio and Pennsylvania, including several who hitched their wagon to Trump’s political movement, are behind in polls by double digits, a remarkable turnabout in swing states that were key to the president’s 2016 victory.

If current polling averages hold, Democrats will maintain all their Senate seats in those states, pick up a handful of House seats and, in some cases, retake the governors’ mansions. In nearby Iowa, a state Trump won by nearly 10 points, the Democratic candidate for governor was running about even with the Republican governor in a Des Moines Register/Mediacom Iowa Poll. Polling this week found Gov. Scott Walker (R-Wis.) trailing his Democratic opponent, Tony Evers.

The dramatic shift has forced political strategists to reevaluate their post-mortem lessons from the 2016 election, while raising new questions about Trump’s staying power in 2020. Democratic strategists, who worried that Iowa and Ohio were slipping away from them in presidential years, are now heartened and have begun to return their attention to the traditional bellwethers.

“One false assumption that was made was that a Trump voter from the 2016 election was necessarily a Republican voter,” said John Brabender, a GOP consultant who is working with Barletta.

There is a clear historical precedent for such a shift. Then-candidate Barack Obama swept the industrial Midwest in the 2008 elections, only to find his party battered in his first midterm contest two years later, when Republicans retook governorships in Ohio, Michigan, Iowa and Wisconsin, along with Senate seats in Indiana and Wisconsin. Obama was nonetheless able to come back and win those same states, with the exception of Indiana, in his 2012 reelection.

Still, the short-term impact is dire for Republicans. After surprising the nation in 2016, Trump appears to be driving turnout this year that will largely benefit Democrats, as moderate voters, and college-educated women in particular, seek an outlet for their frustration with his policies and behavior. Trump’s aggressive campaign schedule for Republicans in these states has so far failed to turn the tide.

“They thought they had unlocked some formula that would make them successful. But it was only Trump and only that year,” Sen. Brian Schatz (D-Hawaii) said of the 2016 election. “What the Republicans are doing now isn’t working for union members or struggling families. It’s not working for young people. It’s just not working.”

Sen. Tammy Baldwin (D-Wis.), who began the year as a leading target for conservative super PACs but is besting Republican challenger Leah Vukmir by about 10 points in recent polls, attributes her success to the return of an energized Democratic voting base, driven by issues such as health care and sustained by how the party, in her view, has built a case that’s bigger than just opposing Trump. . . . . They are saying, ‘No more sitting on the sidelines.’ ”

That same pattern is playing out in Michigan, where Sen. Debbie Stabenow (D) and the Democratic candidate for governor, Gretchen Whitmer, have both had comfortable margins in recent polling. Trump won the state by a whisker-thin margin of 10,704 votes in 2016.

“Everything I am seeing in my numbers is revolving not around his [Trump's] job approval but whether you view him favorably or unfavorably,” said pollster Richard Czuba, who runs a statewide survey for the Detroit News and WDIV. “Donald Trump doesn’t have an opponent, and that is his problem right now. ”

The result is a sharp overall surge in voter enthusiasm in the state compared to 2016, and big swings in suburban areas such as Oakland County, the state’s wealthiest region, outside Detroit. “We are finding it difficult to find college-educated women in Oakland County who will call themselves Republicans,” Czuba said.

In many of the Great Lakes states, candidates like Barletta who most tied themselves to the Trump agenda are still flailing. In Ohio, Rep. James B. Renacci (R), whose first Senate campaign ad was about his tight bond with Trump, has yet to come within 10 points of incumbent Sen. Sherrod Brown (D-Ohio) in a major public poll.

“We have lost millions of members of our party in the last year,” said John Weaver, a Republican adviser to Ohio Gov. John Kasich and a Trump critic, reflecting on how Trump’s bid split the party. “A MAGA candidate who runs as a junior member of the walking dead and wins the primary is going to find themselves shot in the general election.”

Complicating things further is the devotion of the Republican base to Trump’s take-no-prisoners approach, which can make it dangerous for GOP candidates who seek to create some distance.

Trump was able to win in 2016 by contrasting himself with Clinton, who was boasting of an economic resurgence under Obama, in the stock market and unemployment rate, that many voters did not feel in their daily lives.

“Now he is falling into that same line of argument and people are saying, ‘Not so much,’ ” Ryan said. “There is no substantial change.”

The Trump/Pence Regime’s Potemkin Economy

Despite Trump lies, U.S. Steel is not opening plants.

Canada has announced a new round of tariffs on American products in further retaliation for the ill-conceived Trump tariffs.  The Trump/Pence regime's response to growing evidence of harm to American jobs is to lire - the regime's main approach to anything and everything.  Trump even claimed that U.S. Steel would be opening six new plants - the announcement came as a surprise to the corporation which had had NO communications with Trump.  Yet, the lie is typical of what the white Christian extremist/nationalist base eats up and is too stupid to confirm independently. A column in the New York Times looks at Trump's "wake economy" which brings to mind the myth of "Potemkin villages" in Russia. The difference, of course, was no fool while the same cannot be said of Trump's base which is too happy to embrace lies.  One can only hope harsh reality hits this base very, very hard.  Here are column highlights:

According to legend, Grigory Potemkin, one of Catherine the Great’s ministers (and her lover), created a false impression of prosperity when the empress toured Ukraine. He supposedly did this by setting up fake villages, or possibly just facades, along her route, then dismantling them after she passed, and setting them up again further down the road.  

There probably isn’t much if any truth to the story — among other things, Catherine was too smart and tough-minded to be that easily deceived — but never mind: the legend has become a byword for the general idea of prettifying reality to please a tyrannical ruler.

And it seems highly relevant to some of the economic “news” coming out of the Trump administration the past few days. Just to be clear, the U.S. economy is still doing quite well overall, continuing the long expansion that began during Obama’s first term. . . . But Trump’s actual policy initiatives aren’t doing so well. His tax cut isn’t producing the promised surge in business investment, let alone the promised wage gains; all it has really done is lead to a lot of stock buybacks.

Reflecting this reality, the tax cut is becoming less popular over time. And the early phase of the trade war that was supposed to be “good, and easy to win” isn’t generating the kinds of headlines Trump wanted. Instead, we’re hearing about production shifting overseas to escape both U.S. tariffs on imported inputs and foreign retaliation against U.S. products. It’s really worth reading the submission by General Motors to the Commerce Department, . . . . In other words, “Don’t you understand global supply chains, you idiot?”

But meanwhile, how is the administration responding? By making stuff up. Now, making stuff up is actually standard operating procedure for these guys. We’re talking about an administration that’s taking children away from their parents and putting them in cages in response to a wave of violent immigrant crime that doesn’t, you know, actually exist. Trade policy itself is being driven by claims about the massive tariffs U.S. products face from, say, the European Union — tariffs that, like the immigrant crime wave, don’t actually exist.

But these are negative fictions, tales of wrongdoing by others. When it comes to Trump’s own economic policies, by contrast, it’s all puppies and rainbows — happy stories with no basis in reality.

Some of these come from Trump himself. For example, he declared that the head of U.S. Steel called him to say that the company was opening six new plants. It isn’t, and as far as we can tell the phone call never happened.

Meanwhile, reports say that the Council of Economic Advisers did an internal report concluding that Trump trade policy will cost jobs, not create them; Kevin Hassett, the chairman, pressed on these reports, said that he could neither confirm nor deny them; in other words, they’re true.

But the most Potemkinesque story of the past week was the declaration by Larry Kudlow, the administration’s top economic official, that the budget deficit is “coming down rapidly” as “those revenues come rolling in.”  Actually, the deficit is rising fast, mainly because of a plunge in corporate tax receipts — the direct result of the tax cut . . . .

Trump and company are making claims about the results of their policies that bear no relationship to reality. But reality has a well-known liberal bias. Will Trump’s habit of making things up, and his advisors’ willingness to celebrate imaginary policy triumphs, make any difference?

But who will tell him how things are really going? Given what we’ve seen the past few days, they’ll respond to plant closings and economic disruption with fantasies of triumph, while Trump will dismiss reports of problems as fake news. Reality will take a long time to break through, if it ever does. And by then the world trading system may be broken beyond repair.

Again, I wish every economic misfortune possible on states like Michigan, Iowa and Wisconsin that should have know better than to embraces racism and lies.  They deserve immense economic pain. 

The Great Unmasking: the Falsity of Today's "Conservatives"

I left the Republican Party and the so-called conservative moment nearly two decades ago as it became increasingly homophobic, racist, and dishonest - a trend that, in my view, directly correlates with the rise of evangelicals within the Party. Over the intervening years, things have only gotten worse with Donald Trump exemplifying the conservative movements descent into indecency and moral bankruptcy.  Since Trump occupied the White House, pretty much everything conservatives have claimed to stand for over the years has been shown to be a lie as deficits have ballooned, free trade is under attack, and we witness a meddling in the market to benefit specific industries, and the environment is trashed. Meanwhile, white Christian religious extremists and white supremacists are ascendant.  A column in the New York Times looks at this unmasking of today's false conservatives.  Here are column excerpts:

If there is any lasting benefit from the Trump era — which is by no means a sure thing, since democracy may not survive the experience — it will lie in the Great Unmasking: the revelation of just how much bad faith pervades modern conservatism.

Some of us, of course, knew this all along, and are not surprised. Conversely, many centrists and much of the news media simply refuse to face up to the asymmetry of our politics and will persist with bothsidesism even as one side drives us into the abyss. But one can at least hope that the constant revelations of past hypocrisy will have some impact.

These revelations come on many fronts. Flag-waving super-patriots who called Democrats unpatriotic are perfectly OK when Republicans actively collude with foreign dictators. Pious invokers of fiscal responsibility and hysterical debt alarmists are perfectly OK with tax cuts that explode the deficit. Professors who denounce campus political correctness as the greatest threat we face to free speech collude with right-wing activists to conduct opposition research on left-wing students.

Rather oddly, some of the few people on the right who really seem to believe what they were saying are foreign policy neoconservatives. They misled us into a disastrous war; but they appear to have been sincere about their national security concerns, and are among the few Republicans who remain steadfast in their Never Trumpism.

Over the past 40 years or so conservatives have become ever more strident in their attacks on environmental protection. They questioned the science; they insisted that any attempt to limit emissions would greatly damage economic growth; they denounced government intervention and declared the sanctity of free markets.

But none of it was sincere. Climate skeptics have repeatedly given the game away, for example by touting new studies that they insisted would refute global warming, then rejecting those studies when they confirmed it. Economists who tout the limitless ability of markets to cope with change suddenly proclaim them utterly incapable of adapting to a carbon tax.

And now all that talk about free markets is revealed as the sham it always was.

Ten years ago the big debate was whether we should adopt a comprehensive strategy to limit greenhouse gas emissions. For a while it seemed possible that we’d adopt a cap-and-trade system that would in effect place a price on carbon. That effort failed . . . however, technology has been coming to our rescue. The single biggest source of greenhouse emissions, the thing we really need to stop, is coal-fired electricity generation (which has lots of other public health costs too.) And a funny thing happened: coal-fired power became uneconomical. Instead of building new plants, we’re retiring old ones.

Partly this was the result of cheap natural gas thanks to fracking. Increasingly, however, we’re looking at the effects of the technological revolution in renewables, which has produced spectacular declines in the cost of wind and solar power.

So is the Trump administration accepting this market verdict? Of course not: as with trade, it’s abusing powers granted to defend national security on behalf of destructive policies that have nothing to do with security. In this case, it’s planning to force clean energy to subsidize dirty energy.

Why? Probably the main reason is sheer corruption: coal moguls are key Trump backers, and he’s trying to reward them. But there’s also, I suspect, the sheer mean spiritedness that characterizes modern conservatism: “Liberals want clean energy? Hah! We’ll show them!”

[I]t’s yet another demonstration of the pervasive bad faith of the conservative movement. Nothing they said about their reasons for opposing climate policy were sincere, and now they’re perfectly willing to ditch all their supposed principles to keep the coal fires burning.

House Republicans Want More Tax Cuts for the Wealthy

With the GOP/Trump tax cuts remaining unpopular, especially given the $1.8 trillion budget deficit increase they are now projected to cause, Republicans are panicking ahead of the 2018 midterm elections.  So what do House Republicans want to do?  Lead by Paul "Reverse Robin Hood" Ryan, they want to pass an additional $650 billion in cuts by making the cuts for individuals permanent.  Never mind that those cuts disproportionately went to the very wealthy - I have seen less than $50 in difference in pay pay stubs - while average Americans were largely stiffed.  And that doesn't even get into the issue of how Ryan and company seek to slash the social safety net for average Americans.  The only positive news is that Mitch McConnell (who I suspect history will depict as a key player in the end of American democracy) is not keen on the effort since a handful of Democrat senators might vote for the bill and deprive the GOP of a perceived cudgel to use against them in November.  The GOP truly lives in a bubble/alternate universe.  Here are highlights from the Washington Post:

Heading into a contentious campaign for control of Congress, Republicans are increasingly divided over how to bolster their signature legislative achievement — a $1.5 trillion tax cut — amid signs it is not the political gift they had expected it to be last year.

House Speaker Paul D. Ryan (R-Wis.) aims to pass another massive tax cut this summer, which Republicans hope will rev up the GOP base and improve the standing of Republicans at the polls.

But Senate Majority Leader Mitch McConnell (R-Ky.) is under pressure to block a vote, which Republican campaign strategists worry could allow red-state Democrats to vote for additional tax cuts and undermine one of the GOP’s most effective lines of attack in conservative-leaning states: that Democrats voted against a big tax cut last December.

The GOP debate shows how the tax bill, which Republicans rushed to pass in December despite the enormous complexity of overhauling the tax code, has not become the campaign booster Republicans said it would be.

Republicans had bet that increasing the take-home pay of Americans would help them defeat Democrats come November. But months after the tax cut started to affect paychecks, polling shows the legislation remains unpopular. 

That is a major problem for Republicans, who since taking control of the government last year have dealt with party infighting, high-profile retirements, multiple stalled attempts to repeal President Barack Obama’s health-care law and the constant swirl of controversy surrounding President Trump.

Some Republicans have even suggested that voters might not have noticed increases of $40 or $60 or so in their paychecks, partly because many workers no longer get paper pay stubs. . . . . The $1.5 trillion legislation was primarily focused on cutting taxes for companies. It also trimmed individual taxes, but those cuts were left to expire in 2026 to comply with Senate budget rules.

Democrats have seized on the unbalanced approach, which Republicans promised would be rectified.

Conservative leaders met with Ryan on Monday and expect a vote in June or July. That would give lawmakers time to discuss the issue with constituents over the August recess and ahead of Labor Day, the traditional kickoff to the election campaign season.But privately, Republicans trying to knock off Senate Democrats in states including West Virginia, Montana, Indiana and Missouri don’t want McConnell to take such a vote and are urging him against it, according to two GOP strategists knowledgeable about the conversations.

“Holding another vote would take away one of the bigger hits we have against Democrats for this fall and gives them a chance to take credit . . . . Another Republican strategist closely involved in Senate campaigns said that officials with the National Republican Senate Committee were urging McConnell not to hold a vote on individual tax cut permanence out of concern for the benefit to endangered Democrats. The strategist also requested anonymity to discuss the deliberations.

For their part, red-state Democrats appear ready to take advantage of a vote if Republicans schedule one. While enough Democrats would vote against additional tax cuts because of how much they’d add to the deficit, some such as Sen. Joe Manchin III of West Virginia or Sen. Jon Tester of Montana could end up supporting them, thereby undercutting a major GOP line of attack against them.

Still, GOP leaders in the House and some conservative leaders argue that additional tax cuts would offer Americans another reminder that Republicans passed tax cuts in the first place and that Democrats broadly oppose them.

The struggles have led some Republicans to urge candidates to redouble their efforts to sell the tax law, which on average increased after-tax income for taxpayers in all tax groups this year, according to the Tax Foundation, while adding more than $1 trillion to the deficit.

House Republicans obviously believe that voters are idiots and can be bought for $40 per bi-monthly paycheck.  One can only hope that they are proven very, very wrong.

Poll: GOP Tax Cuts Increasingly Less Popular with Voters

Yesterday was tax day and as I drove to our accountant's office to drop of signed forms to permit electronic filing and drop off sizable checks made out to the IRS and the Virginia Department of Taxation (the big check was to the IRS) I happened to tune in to statements being made by the congressional  Republicans that proclaimed their massive cuts to the very rich and huge corporations as beneficial to American taxpayers.  It was enough to make me want to vomit given the rank dishonesty of the the GOP statements.   As I spoke with our accountant about how out of whack our estimated tax payments for 2017 turned out to be - hence the need to write big checks - I received the additional news that the Trump/GOP tax law "reform" would make our tax situation even worse in 2018.  Little mention has been made to all of the small business deductions being eliminated or capped.   The results of a new NBC News/Wall Street Journal poll suggests that more and more Americans are increasingly coming to realize that the GOP/Trump tax "reform" was a massive screw job for most taxpayers, especially small business owners, which only lavished substantial benefits on the 1%.   Here are highlights from CNBC on the poll findings:

As congressional Republicans fight to preserve their majorities, they may need to find a weapon more powerful than the big December tax cuts.

The new NBC News/Wall Street Journal poll shows that the tax-cut law, never broadly popular, has sagged in public esteem lately. Just 27 percent of Americans call it a good idea, down from 30 percent in January. A 36 percent plurality call it a bad idea, while the rest have no opinion.

Moreover, a majority gives thumbs-down on the plan when asked to consider its potential effects. Just 39 percent foresee a positive impact from a stronger economy, more jobs and more money in their pockets; 53 percent foresee a negative impact from higher deficits and disproportionate benefits for the wealthy and big corporations.

"Not a great starting point" for the fall campaign, said Fred Yang, a Democratic pollster who conducted the survey with Republican counterpart Bill McInturff.

Republicans began learning that lesson last month during a special House election in Pennsylvania. GOP strategists found the tax cuts an ineffective message against the Democratic candidates and dropped the issue as Election Day approached.

The Democratic victory in a district President Donald Trump had won by 20 percentage points in 2016 showed that tax cuts are "a political loser," says David Wasserman, a House analyst at the Cook Political Report.

[W]orking-class, middle-class and upper-class Americans all hold negative views of the tax-cut law. Women who have graduated from college call the tax cuts a bad idea by nearly a 3-to-1 margin.

Overall, the NBC/WSJ Poll shows Democrats with a seven-point edge over Republicans, 47 percent to 40 percent, on which party Americans want to win control of Congress this fall. Just 39 percent of Americans approve of Trump's job performance, while 57 percent disapprove.

One can only hope that the full realization of how badly Republicans betrayed the vast majority of Americans sets in before election day in November, 2018.

After Huge Give Away to Wealthy, Republicans Target Medicare and Social Security

Republicans celebrating the $1.5 trillion tax cut.

While it is very difficult to outdo Donald Trump when it comes to lying incessantly, Paul Ryan and other Republicans are trying hard to meet he Trump standard of dishonesty by blaming Social Security and Medicare for the ballooning national debt conveniently forgetting the $1.5 trillion give away  to the obscenely wealthy and huge corporations that they enacted only a few months ago.  How these despicable individuals have the gall to claim that they stand for "Christian values" when their agenda to slash the social safety net is the antithesis of Christ's gospel message.  A piece in the Los Angeles Times looks at the lies, deceit and desire to harm average Americans being pushed by Paul Ryan - who hypocritically claims to be a "devout Catholic" - and similar despicable liars.  If you believe Ryan and "conservative" economists, I have some swamp land to sell to you.  Here are article excerpts:

One would have thought that after saddling the U.S. economy with a tax cut costing $1.5 trillion over 10 years, conservatives and their patrons in corporate America would soft-pedal the usual attacks on Social Security, Medicare and Medicaid.

One would be wrong.

Recently, the drumbeats for cuts in social insurance benefits have been sounding louder. As is traditional, the call for cutbacks is placed in the context of concern about rising federal deficits. Just two weeks ago, five economists and thinkers at the conservative Hoover Institution evoked the "debt crisis" in the pages of the Washington Post.

"To address the debt problem, Congress must reform and restrain the growth of entitlement programs and adopt further pro-growth tax and regulatory policies," wrote the Hooverites, Michael J. Boskin, John H. Cochrane, John F. Cogan, George P. Shultz and John B. Taylor. As for the tax cut bill enacted in December, the sages said not to worry: They called it "a good first step, as it sharply increases the incentive to invest and grow businesses, which will increase incomes." [T]he Committee for a Responsible Federal Budget . . . reckon that the cuts could cost as much as $1.7 trillion over a decade, net of any economic gains it might engender. The Hoover fellows aren't alone in calling for cutting social programs, effectively to pay for tax cuts that go overwhelmingly to corporations and the wealthy. We've documented how Republicans such as House Speaker Paul Ryan of Wisconsin and Sen. Marco Rubio of Florida started calling for benefit cuts even as the tax bill was making its way through Congress. For the record, the Congressional Budget Office projects that Social Security will rise from an average share of 4.9% of gross domestic product now to an average of 5.5% over the next 10 years. Medicare and Medicaid together will rise from 5.4% now to an average of 6.3% in the same period. To place these figures in context, the CBO also expects GDP to nearly double in that time period, to $29.8 trillion. The tax cuts, by the way, will help push the federal deficit over $1 trillion next year, according to the CBO, which makes clear that they won't pay for themselves. "The tax cuts passed last year actually added an amount to America's long-run fiscal challenge that is roughly the same size as the preexisting shortfalls in Social Security and Medicare," wrote Martin Neil Baily, Jason Furman, Alan B. Krueger, Laura D'Andrea Tyson and Janet L. Yellen. "It is dishonest to single out entitlements for blame….The primary reason the deficit in coming years will now be higher than had been expected is the reduction in tax revenue from last year's tax cuts, not an increase in spending." As is invariably the case, the brief against "entitlements" is peppered with misconceptions and outright untruths. The biggest scam related to the tax cuts is the assertion that they'll provide an "incentive to invest and grow businesses," as the Hoover fellows wrote. The CBO projects that the tax act will increase real GDP by an average of 0.7% and nonfarm employment by an average of 1.1 million jobs a year through 2028, but says those effects are front-loaded and will fade as the decade wears on. The evidence thus far is that the shareholder class will receive gluttonous wedges of the pie, while working stiffs will get crumbs. According to a study by the progressive group Americans for Tax Fairness, Fortune 500 corporations will pocket a total annual tax cut of more than $57 billion a year. Those companies have announced wage increases and employee bonuses totaling about $5.7 billion, and stock buybacks of nearly $201 billion.
Indications that businesses of any size will use their tax cuts to make capital investments are hard to find.

The politicians unsheathing their paring knives for Social Security and Medicare undoubtedly are hoping that Americans' memories are short — that when they claim that it's social programs like these that are driving the deficit, no one will recall that the single biggest driver of red ink is that tax cut delivered to the very members of society who needed help the least.