Wednesday, January 3, 2018

Passing Tax Cuts When the Country Is Doing Well Is Pure Lunacy

The recovery from the 2008 crisis has been painfully slow, but it's still a full-throated recovery (minus wage growth, unfortunately). With the recovered wealth we throw a tax-cut party for the well-off. But what's happens when the economy goes south again? We should shudder at the thought.

We just lowered taxes (on the rich) bigly. What happens when the economy goes down bigly? Because it will, sooner or later. Former Treasury Jack Lew explains:
“It’s a ticking time bomb in terms of the debt,” Lew said in a Bloomberg Radio interview with Tom Keene and Jonathan Ferro. “You cannot run a fiscal policy by spending trillions of dollars you don’t have at a time that the economy is doing well.”
And, as Lew points out, the Republican solution to this dilemma is to cut services to the poor and needy. The first hurt are children and the elderly. But nobody has ever accused the GOP of having a heart.

What's worse is what happens when a major recession arrives.

I know there's an easy feeling that "I've got mine, screw them, I'm okay, they're not my job," but the problem is economic degradation affects all of society. It's why people live under freeway overpasses, for heaven's sake. When the next crash comes, down will become downer really fast, because there's no there there to catch us.

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