Yesterday, Secretary of the Treasury Steve Mnuchin testified in front of Congress that the tax cut of December, 2017 would pay for itself before ten years. Really?
This is after the nonpartisan Congressional Budget Office said the tax cut would increase the national debt by $1.5 trillion before it was signed.
This is after we have witnessed the deficit increasing over previous projections the past two fiscal years.
This is after the president said the tax cut would increase GDP growth to 4%. It rose from 2.3% in 2017 to 2.9% in 2018, but softened to 2.1% in 2019.
This is after previous studies that said no tax cut has ever paid for itself. In fact, it is quite nervy to say it would – think of that statement. “It will pay for itself.”
It takes even more nerve to sit in front of Congress and say that it still will, now that the sugar rush has died off. Companies tended to buy back shares with the tax gain rather than invest the gain.
In short, the tax cut borrowed from our future to make a pretty good economy a little better for a little while. For Mnuchin to follow his boss’ lead and ignore facts is troubling. We have a debt and deficit problem that is being downplayed. To solve a problem, it requires admitting we have one.