If the taxes generated from future growth are not greater than the tax cuts, isn't that a cost?
Back to this question, nothing about taxes is a cost, other than to the taxpayer who has to pay the fvcking things. The taxes are the equivalent of revenue and the budget is essentially your AOP. Growth plan is the growth plan, in both instances and equates to your NOP.
What you are referencing are reduced earnings or reduced growth put into business terms which will lead to negative cash flow and an increase in the deficit, translated to debt. It’s not a cost. The costs in this instance are simply the budget and the interest. We have obligated long term expenditures in the budget, as they do the POM on a rolling 3 year cycle every year to earmark funds for the upcoming budgets. In every budget there is a lot of discretionary funding “use or lose” money, and naturally, every organization tries to use it so they can justify it in the next budget. This is the type of **** that can be cut and actually significantly adds up to 100s of billions. The use of lose mentality is what needs to change within Govt spending.
There are a couple of schools of thought on how to achieve that. 1. You reduce your revenues (taxes), not good in business, not good in reference to our debt, but can be used as a forcing mechanism on spending, and same in business in the Govt contracting world to force a RIF in order to reduce your rates. If you reduce your income haul, you either continue to explode your deficit or you cut back your spending. Bru actually alluded to this yesterday, that this would be the next move by the GOP and he’s right. Expect the GOP to go after entitlement reform in 19. Wont happen next year because it’s an election year. We are gonna spend big because it’s an election year. Reducing entitlement spending is a long term goal or at least it used to be of conservatives.
The other school of thought is to spend for growth. This was Obama’s strategy and it didn’t work. Bru blames the GOP, and he’s partially right. The GOP simply chose not to play ball with Obama’s agenda. He could have bent and worked across the aisle but he didn’t. He owns equal share of the economy’s anemic growth over the last 8 years. You basically had the GOP Congress and a petulant child of President playing a game of mine mine mine mine. It’s why I will correctly maintain he was a ****** leader. This is why you hear the term “tax and spend democrats”. They want to tax us to pay for the spending needed to provide the growth necessary to cover their spending which will need to be taxed to spend more for the growth.......
At best, the GOP tax plan will stimulate enough sustained growth to be able to cover the reduced tax revenues. Make no mistake, this tax plan has a larger agenda though beyond growth, and that’s entitlement reform. Everyone knows entitlement and defense spending reform has to happen. No one until Trump has had the balls to go after it. Paul Ryan has been the most outspoken leader for entitlement reform. Tax reform and entitlement reform is his reason for existence. I love this combo of Ryan/Trump for this very reason. Everyone in the country is going to feel the pain on this one. IMO, that’s a good thing, because like environment whackos, we are all citizens of this nation and we should all feel the pain of the reckless spending we’ve done and the cuts we’re going to have to make to get the ship righted. Everyone SHOULD feel the pain.
Getting our growth plan established sets us on the right track as it will enable businesses to shore up their foundations to be able to weather the storm that’s coming. The course we were on was going to see a massive economical crash, it was a decade or so away. We now have additional options at our disposal. For the Democrat plan to work, we would have had to significantly raise taxes and I think you’ve seen Bru advocate for that strategy multiple times on here. He wasn’t wrong, he was correct to his school of thought. There were other ways and what you will see play out, assuming the GOP holds serve, is the other school of thought. The Dem handwringing on this tax plan isn’t for the reasoning they say. It’s because this whole strategy puts they’re whole platform under siege in the coming years.
The reality is, as a country, we’ve tried their school of thought since the great society and war on poverty began. It’s failed miserably. You cannot look objectively at where we are as a nation and think it’s worked. This tax plan represents a course reversal and a new strategy. Is it perfect? Not at all. Is it the best that could actually be passed? Yes.