In a rebuttal to Marsha Shearer’s well researched opinion piece entitled “How’s the Trump tax cut working?”, a number of Trump apologists have cited our current rosy economic state of affairs and have attributed it to Trump and his tax cut. I would disagree as to that attribution. Our current economic state of affairs exists despite Trump and his tax cut. Furthermore, his tax cut undermines our country’s economic future.
Our current economic state of affairs is, in reality, the result of the upswing in the economic cycle following the deep recession that Obama inherited from the Bush administration. A depression was averted when the Obama administration took the orthodox measure of increased deficit spending in a recession and the unorthodox (but, thus far, successful) measure of bailing out the auto industry. We are still benefiting from that economic upswing despite Trump’s disruptive economic actions like attacking health care, provoking a trade war (which he is now trying to get out of), and his tax cut.
As to the Trump tax cut, it is a disaster waiting to happen. Trump is gambling that the disaster won’t happen until after 2020. I will concede that the tax cut does have a good feature in that it encourages corporations to repatriate their overseas profits. However, that should have been done in a revenue-neutral manner at this stage of the economic cycle.
In addition to the drawbacks emphasized in Marsha’s opinion piece, the problem with the tax cut is two-fold. First, it comes during good economic times and balloons the deficit when we should be trying to run a surplus. This will make it very difficult to increase deficit spending when the next recession sets in (which it will). Second, by skewing most of its benefits to the rich, the tax cut exacerbates the inequality of wealth in this country. That inequality is becoming a huge social problem, and it greatly increases the chances of a major depression.
When I became a member of the Republican Party, it was the party of fiscal responsibility. No more.
Scott Fenstermaker is a resident of The Villages.
