Treasury Secretary Mnuchin announced the other day that the US is running out of money sooner than expected and that we might have to raise the debt limit before September.
Wow. Who would have thought that was possible? I mean, you cut revenue and increase expenses, and you're surprised that the debt has increased? This moron used to run a bank - he couldn't see this coming?
This is all the evidence you need to prove that the big tax cut - Trump's only major legislative victory so far - did NOT deliver what we were promised it would deliver. It did not trickle down to the middle class and give them more money to spend so that tax revenues would increase - it did not increase revenue, because the concept is flawed and has never worked since Reagan first tried it. What it has done is balloon our deficit to almost a trillion dollars.
And just to be clear - the debt limit is not a limit on what we can spend - it's a limit on what we can pay for interest on the money we've already spent. Not raising the debt limit is the equivalent of telling your credit card company you won't pay the bill anymore - with similar results, except more serious. Like crashing our economy...
This whole "trickle-down" theory is based on the work of Arthur Laffer, an economist who created what's known as the Laffer Curve, a model that projects revenue vs. tax rates. A lot of other economists disputed this theory, but the Reagan administration seized on it - and it didn't work. Bush 2 tried the same thing, and it still didn't work. Third time is not the charm - doing it again just got the country deeper in the hole, just as it had the last two times.
Laffer was awarded the Presidential Medal of Freedom earlier this year, which baffled some people. What was more baffling was that Trump, in his remarks during the presentation, said that he studied the Laffer Curve as a student at Wharton.
Trump graduated six years before Laffer created his theory and his curve... |
