Ted Kaufman on Our Flimsy House of Cards Economy

Ted Kaufman continues to try and talk some sense into NJ Opinion Page readers:

(Trump Tax Cut) directly caused major losses in federal government revenues, as wealthy individuals, banks and corporations have taken advantage of the reduced taxes and generous tax loopholes. Unsurprisingly, this is contributing to major increases in our annual deficits and the national debt.

The annual deficit for 2018 is forecast to hit $779 billion, $113 billion more than last year. Normally, with a growing prosperous economy, deficits would be coming down, not going up.

Even worse, the Committee for a Responsible Federal Budget’s latest projection is for an annual budget deficit that could hit $1 trillion next year.

The Congressional Budget Office (CBO) reported “at 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, CBO projects, growing budget deficits would boost that debt sharply over the next 30 years; it would approach 100 percent of GDP by the end of the next decade.”

This is not surprising because, in addition to the massive tax cut, President Trump and the Republican House and Senate have been on a spending spree. First there was the $300 billion budget bill and then the $130 billion passed for disaster relief.

Historically, Democratic and Republican congresses adhered to a program called PAYGO. PAYGO required that, before Congress passed spending proposals in the budget, offsets had to be included that would pay for the spending. The present Congress has suspended PAYGO, and no offsets have been required for any of its spending.