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Ultimately, the tax bill will dig a Trillion-dollar hole in the present deficit.
A deficit is not a bad thing itself. It's like an operating loan- big needs make for big expense, but a loan always makes someone some money in interest, and when big needs are met, more money is made because its now much easier to make it.
No nation does the big stuff on a pay-as-you-go way. That's far too inefficient and sketchy, so it never works on stuff that takes years to organize and decades to accomplish.
One nation invests in another, and the interest pays all in some way. it's all done by bonds. Taxation provides the day-to-day funding, while bonds provide the longer term investments that have longer term payoffs.
The deeper the deficit, the more difficult it is to issue federal bonds that deliver enough return to make them profitable to purchase.
This means that our restoring our aging infrastructure, along with other major investments in the nation that are only provided by the federal government, cannot be done, because there aren't any funds available for them. The bonds have always been the primary source of funding for our big interstate projects. And because those items benefit all our states, they are all under federal responsibility.
Ironically, that also means Trump won't ever have the money available to build his wall.
A failing bridge that must be repaired because it's much more important will take precedence or our economy will take the hit. Or a section of critical highway that has been wiped out by a hurricane, or any other drastic need.
Bridges and roads will fail. They will be repaired piecemeal as funds are available, so expect to have one crisis after another, because there will be no huge restoration done at one time that will correct the bad stuff before it fails.
That's only part of our big infrastructure problem. The power grid is another, as is our water and rivers, our communications, our pipelines, our air transport, our forests, and many other things. They are all interstate problems, so they are all under the federal government. Each has its own set of needs that are entirely different for the others.
And we cannot be competitive without them. None of them were free to begin with, and none will be free to restore or improve.
Last edited by banjomike; 12-21-2017 at 01:03 AM..
Today's circumstances are different than they were during Reagan's first term.
Quote:
While tax cuts are a pillar of GOP economic theory, in today's economy, tax cuts that add to the debt are an even riskier proposition than they were under Reagan given baked-in future deficits due to the retiring baby boom generation. In the 1980’s, the baby boom generation was entering its most productive years, buying cars and houses, while women were entering the work force in greater numbers. Now they are retiring, creating a budget strain.
That is the justification Paul Ryan will use to cut Social Security and Medicare. Maybe the GOP can raise the age to 95. Maybe they can tell seniors to go buy a policy on the open market. This has been Paul Ryan's dream.
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