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




