Two Points of Pushback Against My Buddies, re: GOP Tax Plan
(1) Suppose someone argued, “I don’t think it’s right for Donald Trump to be talking trash to North Korea. He is just setting the US up for a big war that might involve nuclear weapons. In terms of foreign policy, he’s writing checks that the American public doesn’t want to cash. It would be much more responsible for Trump to launch a first strike this week, so that we can have the war right now and suffer the casualties, without foisting the bad consequences onto future citizens.”
I think a bunch of you might have been tracking with that critique, up until the last sentence? If so, then do you agree with the large number of free-market economists who say, “Without spending cuts, this tax plan is a scam. Sure, tax cuts are good, but deficit spending is just deferred taxation, as Milton Friedman taught us.” (And I’m not even taking into account supply-side considerations.)
[EDITed to add: I am not mocking people who say the above, and it’s possible I’ve said comparable things during my career. But my current point still stands.]
(2) The effective average tax rate in the US (before the overhaul) is something like 30% (though we can quibble on how to calculate that figure). So for all those people who are complaining that the GOP plan still retains the deductibility of employer-provided health insurance, I don’t really see how this could explain the overall problem with US health care / insurance.
For an analogy, it’s true that a business might have its annual conference in Hawaii rather than Ohio, because of tax deductibility. So that would explain why the business spends $1 million on its conference rather than $700,000. But given that it was spending $1 million, it would be a great conference. It wouldn’t be crappy hotel and food in a freezing location.
So, if everybody thought US health care was awesome but just cost 30% more than it ought to, then I could believe that tweaking the tax code would “solve health care.” But I don’t think that’s really it.
Regarding your first point, as global sovereign debt levels continue to climb, I would expect MMT to become a more popular position on the left and possibly with some “relatively” free marketers. Bill Mitchell has been cranking out material lately on this topic that may be of interest.
http://bilbo.economicoutlook.net/blog/?p=37763
https://www.yahoo.com/news/pakistani-demonstrators-burn-donald-trump-154905567.html
Look at how grumpy people get when the free money stops coming… almost like they feel entitled or something.
I guess Trump isn’t expecting any of those guys to turn up and vote in 2020.
” It wouldn’t be crappy hotel and food in a freezing location.”
Are you suggesting there are no good hotels in Ohio? And you could take in the Allen County Museum!
http://www.allencountymuseum.org/ACM2/Welcome.html.
On a more serious not, “So, if everybody thought US health care was awesome but just cost 30% more than it ought to…” Is this not a widely held view? Taken as a whole US health care is pretty good, but it does cost 30% (or 50%) more than healthcare in similarly developed countries where the healthcare is just as good.
Point 1, the key difference perhaps is “MIGHT involve nuclear weapons” vs “IS deferred taxation”.
There seems a very good chance that nuclear war can be averted, but the deferred taxation is inevitable. Or perhaps I am missing the point.
There are may arguments made that nuclear waste, for example, should be dealt with in some permanent way now rather than simply storing it in situations that are sure to cause problems tomorrow, maybe above ground storage. We tend to avoid following through in those arguments.
You are misstating the 2 problem. In both cases the statement needs two agencies making a total of four points.
Point one, trash talking, assumes the second part, the bomb, as sequential and inevitable. Besides not knowing the outcome of the trash talk, the agents of the bomb are not known, i.e. the president in 2025 and the leader of NK when the talking is over.
Point two, as we know from the Reagan years, there is no correlation between tax cuts/revenue and spending cuts