Take two tax cuts and call me in the morning
Liz Truss sank the pound and threw the British economy into turmoil with her ill-conceived plan to cut taxes on the rich. She resigned today. (The lettuce lasted longer than she did.) But if you think the lesson of her folly has been learned on this side of the pond, think again:
Republicans routinely declare that inflation is their “best” issue in the midterms. But there is no reason to think inflation would shrink under a GOP majority in the House or Senate. Indeed, Republicans are projecting they would make inflation worse.
The Post reports, “Republicans plan to push to extend key parts of President Donald Trump’s tax cuts if they take control of Congress in this fall’s elections, aiming to force President Biden to codify trillions of dollars worth of lower taxes touted by his predecessor.”
Wait, what happened to their hand-wringing over inflation? Do they expect voters to believe that tax cuts primarily for the rich wouldn’t be inflationary?
In fact, when the Trump tax cuts were first passed, Republicans insisted they would pay for themselves by boosting economic growth. (That didn’t happen, but it did spur stock buybacks, contrary to Republican claims.) At a moment when Republicans are hollering about fiscal irresponsibility, it is bewildering that they are doubling down on the same tax cuts.
Jim Kessler, head of the moderate Democratic Third Way think tank, tells me, “Tax cuts like that in the U.S. would contradict everything the Fed is doing and put the U.S. economy in an inflation-driven tailspin.”
Jason Furman, former chairman of the Council of Economic Advisers, compares the Republican proposals to British Prime Minister Liz Truss’s disastrous tax proposal that sank the British pound, and led to Truss’s resignation, arguing, “At worst they could also cause a U.K.-style market meltdown. Either way they are completely at odds with the argument that deficits have fueled inflation.”
This should end any talk that the election is a choice between addressing inflation or protecting democracy. In reality, it’s about whether Republicans will be granted power to make inflation worse and to threaten democracy.
It’s all they know. Sadly, way too many Americans have been brainwashed into thinking they have all the right ideas about the economy. Then they sink it, the Dems are elected and do all the hard work to fix it and the Republicans jump back in with promises of tax cuts. It’s been working like that for decades. Isn’t it time we changed the channel?