Regular people hurt as tax cuts for rich, reckless spending fuel national debt
Editor:
We may not be experiencing a temporary economic adjustment. Long-term problems hurting consumers since the Reagan tax cuts and now the further ballooning deficit are out of control. Nostrums to deal with this – too long in vogue – are killing us.
Tariffs hurt prices. Bonds yields are falling as our friends increasingly buy bonds from other, less risky, trade partners. The One Big Beautiful Act ballooned deficits and the printing of money.
Since consumers have to pay a higher percentage of their income for good, the benefits of tax cuts and interest rate increases hugely favor the selfish elites who are now working with politicians to control our lives. No matter what the Administration claims (daily) about ending the oil crisis it started, that is not enough to patch the basic problem.
Since Reagan, our national debt has increased 3,700 percent in absolute dollars. It now constitutes 100 percent of Gross Domestic Product – and with the Trump tax cuts will by 2054 with interest be 166 percent of GDP. Interest payments on our debt has increased 1,000 percent!
Think for example that even relatively small Reagan’s first round of cuts in ’81 helped the top 1% sixty eight times what reached the average consumer. And tax cuts do not solve the problem. The London School of Economics looked at 50 years of data from 18 advanced economies and tax cuts consistently increased income inequality without growth in GDP! Growth in GDP is what helps consumers!
Additionally thinking that spending cuts work is a false claim. Trump cut Medicare part A 12% already. It did not result in our promised $2,000 checks and is breaking the budgets for rural hospitals (in particular). By the time we initially fired 10 percent of government employees, we merely saved 1 percent. Tax cuts since ’81 have simply thrown spending onto localities which are in large part financed by property tax – another regressive effect.
We need sound economic, principled capitalist, answers. All too many confuse capitalism with profits and not the sound economics of competition. Solutions to talk about include: 1) nominal dollar ceilings each year for non-discretionary programs rather than percentage increases tied to growth formulas ties such as GDP or inflation; 2) Doing away with caps on Social Security contributions; 3) Wealth taxes; 4) Use flat rate, no cost overruns allowed, military contracts as some other countries do; 5) Convert from an estate tax to a capital gains tax – this would avoid the current US problem which results in elites simply borrowing money to live on and pay interest rather than tax estate tax when they die. Obamacare was similar to the Swiss answer for a mixed private and public system but the best features were stripped out by the Supreme Court. There are several less expensive medical systems that combine public and private choices and cost 2/3 or less than what we pay.
We are facing ever increase trouble unless consumer’s income and standard of living come first. Vanity projects like a ballroom and putting his name on the monument built for President Kennedy – The Kennedy Center – not only waste money but also demonstrate indifference to real people problems.
The US needs to return to party politics as they existed when I was young and life was good. We had two “big tent” parties – Eisenhower Republicans and FDR Democrats. Both put consumers first and said it plainly and without bowing to extremists.
It was Eisenhower who said to beware of the Military/Industrial Complex. We paid our way. If candidates do not meet these tests and rely on hate as a recipe for good governance, send them out to pasture.
Conrad F. Cropsey
Albion
