Did you see this op-ed?
ICYMI, we wanted to be sure you saw this op-ed by Treasury Secretary Bob Rubin on the dangers of the GOP Tax Scam in this morning’s Washington Post. Secretary Rubin rejects Republicans’ claim that these tax cuts will pay for themselves and highlights how it will worsen the nation’s fiscal outlook. Read his full op-ed here and find highlights below:
“The deficit-funded tax cuts advancing through Congress are a fiscal tragedy for which our country will pay a huge price over time. While the details of the tax plan remain in flux, its fundamental contours will not change. Nor will its $1.5 trillion of deficit funding, the amount stipulated in the recently passed budget resolution.”
“To start, the tax cuts will not increase growth and, given their fiscal effects, would likely have a significant and increasingly negative impact. The nonpartisan Tax Policy Center’s latest report estimated that, over 10 years, the average increase in our growth rate would be roughly zero, counting the crowding out of private investment by increasing deficits but not counting other adverse effects of worsening our fiscal outlook.”
“Adding $1.5 trillion or more to the federal debt would make an already bad situation worse.”
“First, business confidence would likely be negatively affected by creating uncertainty about future policy and heightening concern about our political system’s ability to meet our economic policy challenges.”
“Second, our country’s resilience to deal with inevitable future economic and geopolitical emergencies, including the effects of climate change, would continue to decline.”
“Third, funds available for public investment, national security and defense spending — a professed concern of many tax-cut proponents — would continue to decline as debt rises, because of rising interest costs and the increased risk of borrowing to fund government activities.”
“Fourth, Treasury bond interest rates would be highly likely to increase over time because of increased demand for the supply of savings and increased concern about future imbalances. That, in turn, would raise private-sector interest rates, which could also increase due to widening spreads vs. Treasuries, further reflecting increased concern about future conditions.”
“Finally, at some unpredictable point, fiscal conditions — and these market dynamics — would likely be seen as sufficiently serious to cause severe market and economic destabilization.”
“To start, the tax cuts will not increase growth and, given their fiscal effects, would likely have a significant and increasingly negative impact. The nonpartisan Tax Policy Center’s latest report estimated that, over 10 years, the average increase in our growth rate would be roughly zero, counting the crowding out of private investment by increasing deficits but not counting other adverse effects of worsening our fiscal outlook.”
“Adding $1.5 trillion or more to the federal debt would make an already bad situation worse.”
“First, business confidence would likely be negatively affected by creating uncertainty about future policy and heightening concern about our political system’s ability to meet our economic policy challenges.”
“Second, our country’s resilience to deal with inevitable future economic and geopolitical emergencies, including the effects of climate change, would continue to decline.”
“Third, funds available for public investment, national security and defense spending — a professed concern of many tax-cut proponents — would continue to decline as debt rises, because of rising interest costs and the increased risk of borrowing to fund government activities.”
“Fourth, Treasury bond interest rates would be highly likely to increase over time because of increased demand for the supply of savings and increased concern about future imbalances. That, in turn, would raise private-sector interest rates, which could also increase due to widening spreads vs. Treasuries, further reflecting increased concern about future conditions.”
“Finally, at some unpredictable point, fiscal conditions — and these market dynamics — would likely be seen as sufficiently serious to cause severe market and economic destabilization.”