Economists Slam Trump Administration's Tax Cut Lies After New Data Reveal the Ballooning Deficit
Under President Donald Trump, the federal deficit is spiking 17 percent in 2018, according to new government data.
The biggest culprit in the rise? The Republicans' tax cuts, which funneled the large majority of the benefits to wealthy people and corporations.
At $666 billion in 2017, the deficit will now climb to $779 billion in the 2018 fiscal year. Though Republicans consistently decried the rise in deficits under President Barack Obama, they've now let the government's shortfall shoot up to the highest level since 2012, when the country was still struggling to climb out of the ditch created by the 2008 financial crisis.
The GOP had promised that their tax bill — which was projected to cause a shortfall of at least $1 trillion over ten years — would actually, contrary to all evidence and history, decrease the deficit by unleashing growth. That, of course, hasn't happened.
"I repeat: Tax cuts for the wealthy and corporations don't pay for themselves," said economist Robert Reich in response to the news.
Meanwhile, Paul Krugman pointed out that the administration is lying about the source of the deficit growth, attributing it to government spending. Treasury Secretary Mnuchin attributed the rise to "significant investment in America’s military."
The New York Times observed:
But the numbers released by Mr. Mnuchin’s department suggest falling revenues were a far larger contributor to the rising deficit than higher spending. Federal outlays increased for the fiscal year, but, because the economy grew at a faster pace than outlays did the previous year, they fell as a share of the economy, to 20.3 percent from 20.7 percent.
"Even on the most basic things, you can count on this administration to lie -- an everyone treats it as normal," said Krugman.
"This is bananas for an economy where unemployment is at a forty year low," said economist Justin Wolfers of the new data. "It's nuts. Plumb loco. As clear of a statement of a commitment to fiscal irresponsibility as you could make."