A Critique of MAGAnomics
You want the truth? You'd better be able to handle the truth! According to the Federal Reserve Bank of St. Louis, the federal government took in $350.2 billion in the first quarter of 2018. That's a rise of 5.8 percent and a lot of "crumbs" for Democrats to invest in government programs. I wonder what the over/under is on when tax-and-spend progressives recognize the ONLY WAY to create a huge safety net is feed the ATM taxes from happy tax payers.
I define "happy tax payers" as (1) households that have more discretionary income (after fixed costs like mortgages) than they pay in taxes and (2) businesses that pay more in salaries and dividends than they pay in taxes. My formula is so simple as to be obvious to everyone but those who resent wealth (like Elizabeth Warren). Everybody in Washington should be all smiles because we the people pay their salaries. Duh!
NEC Chair Larry Kudlow told Face The Nation "the entire $1.5 trillion tax cut is virtually paid for by higher revenues and better nominal GDP." His statement was corroborated by the CBO in its June 2017 update and April 2018 update when they increased 10-year federal revenue estimates by $1,283 billion, which is 88 percent of the tax cuts net cost ($1,456 billion). To be sure, the CBO scoring is not exact science, but the agency is the official score keeper - and the turnaround does suggest Trump has been good for the US economy.
Contrast Trump's tax cuts and economic expansion with President Obama's 2013 tax hike and economic stagnation. Obama raised taxes by $650 billion to "improve the deficit and fairness." After twelve revisions, the CBO had decreased the 10-year revenue estimates by $3.1 trillion, because of slower economic growth. Whether the CBO scoring is exact science or not, I prefer the Trump outcome over the Obama outcome. Furthermore, a single CBO revision reported the tax-cut stimulus covered 75 percent of the tax cut's cost. The suddenness of the revision is shocking to my inner economist.
Mind you, I am not celebrating Donald Trump because Jeb Bush and Marco Rubio also promised tax cuts. I am celebrating the power of the US economy to pay as it goes about providing for its citizens. According to the February 2018 Bureau of Labor Statistics report, "the non-stop job creation since the election has yielded 2.9 million jobs. Goods-producing industries such as manufacturing, mining and logging, and construction collectively had the highest month-to-month growth since 1998." The BLS reported this week a "record-breaking 155.9 million people were employed in July 2018, and US workers received their biggest pay increases in nearly a decade over the 12 months through June."
By the way, when Americans receive a pay raise or bonus, it is subject to withholding or income taxes that pay for all the "free" stuff Bernie Sanders wants to provide. Therefore, GDP growth of 4.1 percent is a good thing because a rising tide does lift all boats. Today's less-regulated and less-taxed economy is driving higher incomes, but it is also reducing entitlement spending. 2 million fewer people get food stamps. Enrollment in Temporary Assistance for Needy Families dropped 12 percent in 2017 alone. A million people dropped off Medicaid and CHIP in 2017. This is great news, especially for the newly employed - who now have the dignity of a job.
I believe in American dynamism and exceptionalism, and I know the USA is blessed with incredible natural resources that are monetized like nowhere else in the world. I also believe the gainfully employed have a moral obligation to fund a safety net for widows, orphans and disabled veterans. And I believe there is a smart way to ensure the American Dream for almost everyone: focus first and foremost on economic opportunity and happy tax payers - and learn to live with the smiling faces of former welfare recipients.