Category Archives: Debt and deficits

The return of $1 trillion deficits

tax, taxes, debt, deficits, spending, trillionBy Steve Brawner

© 2017 by Steve Brawner Communications, Inc.

Let’s say you’re changing jobs, leaving one that was relatively secure for one with an uncertain future. You think it’s possible you’ll make more money, but it’s likely you’ll make less. What would you do beforehand?

You probably should carefully determine what your spending patterns are, and then adjust downward until they match your most likely income. You’d look for areas of waste first, followed by luxuries. But then you might also have to cut some of the more important stuff.

Once you’d done that, then, one last time, you’d carefully consider if changing jobs is really the wisest move. And then if it’s still a go, you would do all you could to find additional revenues.

And if you did all that, you would be doing the opposite of what Congress is doing. Continue reading The return of $1 trillion deficits

Not if you don’t cut spending

By Steve Brawner

The economy grew 3 percent in the third quarter, which was pretty good – almost as good as the second quarter, when it grew 3.1 percent. The past four quarters, in fact, have been better than the previous four. Meanwhile, the federal budget deficit was bigger in 2017 than it was in 2016.

Hmm. That’s weird, because we’re being told that economic growth by itself reduces deficits.

Here’s the background. President Trump and congressional Republicans have been pushing for tax cuts. To get there, they needed to pass a budget that would allow the cuts to pass with a simple majority. Otherwise, the Democrats would filibuster.

The House of Representatives voted for a budget that included a framework for both tax cuts and offsetting spending cuts. On paper, the yearly deficits would end by 2027, though the overall debt, now $20.4 trillion and much bigger by 2027, would remain.

Then the Senate passed its own budget that includes a framework for tax cuts, which are popular, without spending cuts, which are not. In fact, it calls for a total of only $1 billion in cuts out of a potential $47 trillion in spending. That’s a cut of .00002 percent. If you weighed 250 pounds and were trying to lose weight, that would be .005 percent of a pound. That’s some kind of painless diet. Arkansas Sens. Tom Cotton and John Boozman voted for it. The House of Representatives, including all four members of the state’s delegation, quickly voted to shelve their own plan in favor of the Senate’s. Continue reading Not if you don’t cut spending

Paying for this storm, and the storms to come

Hill, Maria, hurricanes
Rep. French Hill represents Arkansas’ 2nd District.

By Steve Brawner

American citizens in Puerto Rico are suffering, but unlike when Hurricane Katrina struck New Orleans, the victims can’t drive across the border to a welcoming state like Arkansas. Texans, Floridians and others are hurting from hurricanes, too, and Californians have lost their homes due to wildfires.

In such situations, should members of Congress vote for any aid package, even if they think it’s a bad one?

Rep. French Hill, R-Arkansas, said no last week. The congressman who represents central Arkansas was one of only 69 members of the U.S. House who voted against a bill providing $36.5 billion for relief and recovery efforts after Hurricanes Maria, Harvey and Irma and the California wildfires. The package drew a yes vote from 353 members.

Continue reading Paying for this storm, and the storms to come

Stealing from our grandkids

tax, taxes, debt, deficitsBy Steve Brawner

Be warned: Elected officials in Washington will try to buy your vote with your grandchildren’s money.

If recent history is any guide, they’ll do that by cutting  taxes without cutting spending by at least the same amount, increasing the national debt. And a big reason why they would do it is because they cannot seem to do anything else. After failing to repeal Obamacare, they think they’ve got to do something.

The details of the proposal released by President Trump and congressional Republicans Sept. 27 are still vague. But among the highlights are, it would reduce the number of tax brackets from seven to three, the highest being 35 percent instead of the current 39.6 percent. Congress would have the option of creating a fourth, higher tax bracket for the wealthy. (Don’t hold your breath.) To offset some of the lost revenue, it would repeal many itemized deductions. (Lots of lobbyists will fight this one.) It also would end the estate tax and reduce the corporate tax rate from 35 percent to 20 percent. Continue reading Stealing from our grandkids