The problem is, he explains, that we need more revenue. One obvious problem is that millions more Baby Boomer Americans will retire each year and require Social Security and Medicare. The Congressional Budget Office projects a deficit for 2018 of $487 billion, and is expected to rise to triple that by 2027.
Harwood says: "Already Social Security and Medicare comprise about 40 percent of federal spending and 8 percent of the economy. The only way for those numbers to go is up.
"In 2017, 45 million Americans receive Social Security retirement checks. . . . By 2027 -- the end of the 10 year period in which the budget would take in $1.5 trillion less -- 60 million will receive [those checks]. . . . By 2033, 77 million Americans will be eligible for Social Security. Because life expectancy keeps rising, a growing share of them will be over 85, the age group requiring the costliest health services. . . . And because Baby Boomers had fewer children than their parents, the number of tax-paying workers supporting each retiree will drop from 2.8 to 2.1."
None of these frightening statistics even address our pressing need for infrastructure investments, which are vast and increasing. "Federal spending and taxes will have to grow significantly. This is not a statement of political values. It's a reflection of basic realities," writes Paul Van de Water, an analyst at the Center on Budget and Policy Priorities.
So what are the Republicans doing about it in their budget proposals? Lost in a world of "tax cut fantasy." They still cling to the disproved mantra that cutting taxes on the wealthy prompts investments that spur the economy to grow -- and tax cuts pay for themselves, and more.
Back to Harwood, who writes: "Treasury Secretary Steven Mnuchin claims increased growth will create so much new tax revenue that it will reduce deficits and help pay down the nation's $20 trillion debt. . . . Yet mainstream economists in both parties, citing evidence of recent decades, say growth won't recoup all the lost revenue.
"Greg Mankiw of Harvard, a top economic advisor to President George W. Bush, once described those who say tax cuts will pay for themselves and more through growth as 'charlatans and cranks.' Glenn Hubbard of Columbia, another top Bush advisor, estimates that individual tax rate cuts might generate enough to cover 30 percent of lost revenue, corporate cuts around 50 percent.
[Harwood continues] "If so, GOP tax and budget plans would require the government — already projected to borrow another $10 trillion over the next 10 years — to borrow even more as Baby Boomers draw their checks. If the economics profession proves more accurate than Trump, the national debt will grow higher as the economy grows, not lower. . . .
"The Senate last week voted to let tax cuts create higher deficits. If the House goes along, the GOP tax-and-budget framework will rely on highly speculative revenue projections to finance spending obligations that will keep growing as a matter of demographic certainty.
"'This is wishful thinking replacing responsible budgeting,' says Maya Macguineas, who directs the nonpartisan Committee for a Responsible Federal Budget. 'It's going to end us up with a mountain of debt.'"
* * * * *
Republicans call the Democrats the party of "tax and spend." The Republicans have become the party of "tax cuts and deficits." Their promise of stimulating growth with tax cuts just doesn't work out -- over and over again. Sure, it stimulates some . . . but, over time, never enough to cover the tax cuts.
You know what they say about people who keep doing the same thing and expecting different results. And, to make it worse, we actually have a certifiable president who has trouble distinguishing reality from his own thoughts.
Once again, we'll have to elect a Democratic president and a Democratic Congress to bail the country out of a huge budget deficit and debt. The cycle repeats. Let's hope we can survive it this time.
Ralph
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