Sunday, July 30, 2017

Will Congress kill tax reform?

"How excited am I about getting a tax cut this year? About as excited as seeing next year's health care premium increase. Thanks a lot Congress - thanks for nothing." 

Last night as I was waiting to drift off into the arms of Morpheus, I was pondering all kinds of things. One thing in particular, was the most recent failure of Congress with repeal and replace. Then I had this most vexing thought - at what point in time, did Congress become so inept? I mean which a few nut ball exceptions from California, we do elect the best of the best to represent us in the House and Senate. When was it? What year was it? When did the train go off the tracks with this esteemed institution of power?

Then it hit me like a punch to the gut. No individual, no foreign power, no organization has ever hurt this country as deeply as our own Congress has. And that "hurt" has been going on for decades. When all the fat is seared away, what was left was this nugget. Congress has financially wrecked this country. Let that sink in must for a minute.

Congress has stepped away from their fiduciary responsibility to protect this land and her people from harm - which includes financial harm. They have obligated monies for many years now without having the resources to back them up. In short, we have been making bets with no money to back them up. Bottom line? Congress has spent us into bankruptcy.

Before anyone thinks this is just more histrionics, first consider some stark facts. With $20T in our national debt (plus the CBO believes it will go to $30T by 2027), over $100T of unfunded mandates, infrastructure from the Pacific coast to the Atlantic seaboard needing trillions of dollars to fix, a military needing upgrading, states and cities ready to go broke - where is the money going to come from? 

I know, I know - I am a fan of Art Laffer also. Reducing taxes can lead to growth which will increase overall monies coming into the treasury. Simple supply side economics, or "Reaganomics" as some call it these days. The Keynesian policies we have had the past eight years have not worked well. The result? High debt and sluggish GDP. But now the question is simply this - will a return to a tax policy similar to Reagan's tax policy of the 1980's still work? Or are we too far around the curve?

My fear right now is simply this. Will our precarious financial position spook our law makers in September? Congress was stripped naked last week when they screwed up the long promised health care reform. In short - their timidity was revealed.

To fix the country (which they have screwed up over the decades) with bold tax reform, might be a bridge too far for Congress. Our Keynesian policies from the past might look like a "safe harbor" in these uncertain days. Translation = once again, Congress will do nothing. 

One more word about our "do nothing" Congress. Not only have they driven our great country to the brink of bankruptcy, many who serve in both the House and Senate have become mysteriously wealthy in doing so. Not just a little wealthy, but some very wealthy. Why do I brink that up (besides for moral reasons)? Because when you have that kind of wealth, tax cuts are not as critical for you. However for the little guy out here, trying to make ends meet, every dollar sent to Washington or St. Paul is one less to spend on our families. 

How excited am I about getting a tax cut this year? About as excited as seeing next year's health care premium increase. Thanks a lot Congress - thanks for nothing. 


  1. How old are you? If you were alive and aware during the Reagan years you will remember....
    Reaganomics was logically unsupportable and is historically and mathematically discredited, yet the right doubled and now wants to triple down on that philosophy as sound policy.
    The only logical conclusion to take away from Reaganomics’ current level of public support is that greed trumps reason and history by such a degree as to blind us all to the future.
    Like many sub-Saharan Africans, we are eating next year’s seed corn because our GOP leadership is telling us not to worry about it.
    The rich will feed us next year.
    The job creators will feed us next year but only if we can still buy their products next year.
    And their are no products and few to buy them.
    Otherwise a good article regarding taxes.
    Dave Gjerdingen

  2. The only thing I want from tax reform is the doubling of the standard deduction.