Finally, the Big Plan

It's tax cut season in the Senate and here is what they are doing. Many of the tax cuts in the Tax Cuts and Jobs Act of 2017 expire at the end of this year. If Congress decides to extend these tax cuts for a decade, that decision would increase the U.S. deficit by at least $3.8 trillion and probably closer to $4.5 trillion, according to the conservative Tax Foundation.

Last week, however, the U.S. Senate passed a budget resolution declaring that the extension of the tax cuts from the 2017 act would increase the U.S. deficit by zero dollars. in other words, to assume that the current tax cuts in the 2017 act are permanent, even though many will legally expire by the end of 2025, they include them anyway.

The Senate’s budget resolution also authorizes $1.5 trillion in additional tax cuts, plus another $500 billion in new spending on immigration and defense. The $1.5 trillion in additional cuts would presumably allow for the passage of other tax measures proposed by President Donald Trump during his campaign: the elimination of income taxes on tips, overtime and Social Security benefits, as well as a new deduction for interest paid on car loans. Yet the Senate resolution provides for spending cuts of just $4 billion, despite allowing for total revenue losses of $5.8 trillion — $3.8 trillion from extending the 2017 act plus $1.5 trillion in additional tax cuts, plus $500 billion in additional spending. It's nothing more than a money grab since they control the House and Senate.

Instead of establishing sensible parameters for spending cuts, the Senate resolution calls for a $5 trillion increase in the national debt limit by this summer. In fact, Republicans have increased the deficit more than Democrats going all the way back to Calvin Coolidge. They only get deficit religion when Democrats are in office.

And while I keep arguing for a tax code change which would reduce income taxes slightly on the lowest about 70% of taxpayers and increase taxes progressively on the remaining tax payers, no one seems to want to engage in a reasoned discussion.
I am in the top 10% of income earners this year, and what I'm suggesting would only have increased my tax bill by about $800.

Here is a comment in one of our newspapers.
Translation:
"The Danger Isn’t Over – Here’s What’s Coming Next"
"There’s a reason why a bunch of seven-year-olds with “ants in their pants” aren’t allowed to take over the control tower at Arlanda Airport. The global economy seems to operate with lower standards. But the Trump circus has barely begun. His next reckless move could be just around the corner.“This was Donald Trump’s strategy all along,” U.S. Treasury Secretary Scott Bessent declared pompously after announcing paused tariffs and new economic war measures against China. You could almost hear the world snicker. Sure, buddy. A testament to the quality of decision-making: the countries affected couldn’t even interpret what the announcement meant. It seems someone with basic cognitive function finally explained to Trump that the U.S. was heading for a crash that would make 2008 look like summer camp. The spike in U.S. bond yields told the story. It began to resemble a financial bank run—investors fleeing in panic. Not ideal for a country with a debt at 120% of GDP. The brilliant idea to start a trade war against everyone—including the world’s penguins—was over after just 13 hours. Some kind of record. Then Trump claimed credit for calming the markets. Like an arsonist asking for a medal for calling the fire brigade. Beautiful!

Never have so many smart people spent so much time trying to intellectualize something so dumb. What's Trump’s real plan? Like searching for a pearl in a cesspool.

So, where are we now? The 10% tariffs remain, including against the EU—and Sweden. What happens after the 90-day grace period is unclear, but Trump has made it clear: he expects others to bow to his will. China hasn’t backed down. Instead, it hit back. This “lack of respect” prompted Trump to raise tariffs again—to 125%. There’s no doubt China is no friend to the West and has ruthlessly stolen technology. Its military posturing around Taiwan is a looming threat. But a full-scale U.S.–China economic war would hurt many. China's leadership doesn’t care about building a just society—it’s about holding power and achieving dominance. One thing they never do: show weakness. Beijing’s recent rhetoric—“ready for all kinds of war,” “we will fight to the end”—may be propaganda, but it’s ominous. The trade war hits China hard. It’s grappling with a burst real estate bubble, massive corporate and regional debt, and overcapacity in industry. But in a dictatorship, the danger isn’t just economic—it’s the unrest that economic pain triggers. Xi Jinping fears protest, and tolerance for it is minimal. In such a situation, going on the offensive can seem like the only option. China exports goods to the U.S. worth 4.4 trillion SEK annually—over 13% of U.S. imports, mainly phones and computers. U.S. companies must now find new suppliers, likely at higher costs, feeding inflation. Some products, like rare minerals, have few alternatives. Yet China is also the U.S.’s third-largest export market—buying soybeans, oil, airplanes. China will look for other buyers, and Europe will be flooded with cheap goods. Good for consumers—bad for European companies. Sweden will be affected too.

In short: more turbulence ahead.

China has many ways to retaliate. U.S. giants like Apple and Tesla depend on Chinese sales, and Beijing can make life difficult for them. China might also devalue its currency or dump U.S. debt. It holds $760 billion in U.S. bonds—making it the second-largest lender.

U.S. national debt is its Achilles’ heel. More interest rate spikes could shake the global economy. That might even trigger one of Trump’s more radical ideas. Part of the so-called Mar-a-Lago Plan, devised by advisor Steve Miran, is to force other countries to exchange their U.S. bonds for new 100-year bonds with much lower interest. In practice, it’s a partial default. Sounds crazy? It is. It could spark massive capital flight and a global financial crisis. But no one doubts Trump is willing to try anything—if only for a few hours. Trust that countries and corporations are now making plans to reduce their dependence on the impulsive seven-year-old in the West."

Original article for reference:
https://www.aftonbladet.se/nyheter/...rkus-trump-har-bara-borjat-faran-ar-inte-over


So what do you think—is this “the big plan”?

Thanks for bringing this up. The GOP, independent of Trump, have been consistent in serving the wealthiest and lying to the public about it my entire lifetime. The tax cuts, while signed by Trump, were not his idea (he had none), but would have been signed by any Republican President in office at the time. Reagan did it, both Bushes did. There has never been anything "fiscally conservative" about any Republican President. This plan, however, is consistent with the Trump financial methodology that bankrupted his casinos and other businesses.

Indeed, the deficit is entirely the fault of the GOP:


"Tax cuts initially enacted during Republican trifectas in the past 25 years slashed taxes disproportionately for the wealthy and profitable corporations, severely reducing federal revenues. In fact, relative to earlier projections, spending is down, not up. But revenues are down significantly more. If not for the Bush tax cuts and their extensions—as well as the Trump tax cuts—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining."

Extending these tax cuts in the current economy (actually in any economy) is fiscal insanity.

"In the 34 years after 1946, the federal debt declined from 106 percent of gross domestic product (GDP) to just 25 percent, despite the federal government’s running deficits in 26 of those years. The debt ratio declined for two reasons. First, the government ran a “primary,” or noninterest, surplus in a large majority of those years. This means that, not counting interest payments, the budget was in surplus. Second, the economic growth rate exceeded the Treasury interest rate in a large majority of those years. These two factors—along with the starting debt ratio—are the levers that control debt ratio sustainability.7 With a primary balance, the growth rate need only match the Treasury interest rate for the debt ratio to be stable. The presence of both primary surpluses and growth rates that exceeded the Treasury interest rate created significant downward pressure on the debt ratio.8

The nation’s fiscal pictured changed in 1981 when President Ronald Reagan enacted the largest tax cut in U.S. history,9 reducing revenues by the equivalent of $19 trillion over a decade in today’s terms. Although Congress raised taxes10 in many of the subsequent years of the Reagan administration to claw back close to half the revenue loss,11 the equivalent of $10 trillion of the president’s 1981 tax cut remained."

Every single time that the GOP has gotten power in my lifetime - they’ve grown the gap between the wealthiest and the rest of us in this country.

Trump 2.0 is no different.

The GOP is fixing to crush the US economy, period. As noted in my previous post, the deficit declines when growth is robust, and interest rates are low. That was the situating when Biden left office, and Obama, and Clinton. Now, however, Trump’s reckless behavior is reversing both of those conditions, and Republicans are about to knock the props out from under the economy.

BirdinHand said:

Every single time that the GOP has gotten power in my lifetime - they’ve grown the gap between the wealthiest and the rest of us in this country.

Trump 2.0 is no different.

Click to expand...

Yup.

If you confront them they’ll just dismiss you.

Who are you gonna believe?

Us? (Blows nose into hundred dollar bill)

Or your lying eyes?

What if...? said:

Yup.

If you confront them they’ll just dismiss you.

Who are you gonna believe?

Us? (Blows nose into hundred dollar bill)

Or your lying eyes?

Click to expand...

I can’t wrap my brain around how it isn’t evident to people. I really cannot. The data is there. Data doesn’t lie, it just is.

Trickle down economics has decimated the middle class in the US.

And yet you cannot convince certain people otherwise. It makes no sense.

BirdinHand said:

I can’t wrap my brain around how it isn’t evident to people. I really cannot. The data is there. Data doesn’t lie, it just is.

Trickle down economics has decimated the middle class in the US.

And yet you cannot convince certain people otherwise. It makes no sense.

Click to expand...

Nothing in human history has ever “trickled down” that anybody would want to get on them.

No share of the nations wealth ever did.

We never saw a benefit.

BirdinHand said:

I can’t wrap my brain around how it isn’t evident to people. I really cannot. The data is there. Data doesn’t lie, it just is.

Trickle down economics has decimated the middle class in the US.

And yet you cannot convince certain people otherwise. It makes no sense.

Click to expand...

That's fake data. You need to look at the "alternative" data. Just not too closely at it.

lwf said:

That's fake data. You need to look at the "alternative" data. Just not too closely at it.

Click to expand...

I’m sure there’s a YouTube video somewhere instead

Tensor101 said:

It's tax cut season in the Senate and here is what they are doing. Many of the tax cuts in the Tax Cuts and Jobs Act of 2017 expire at the end of this year. If Congress decides to extend these tax cuts for a decade, that decision would increase the U.S. deficit by at least $3.8 trillion and probably closer to $4.5 trillion, according to the conservative Tax Foundation.

Last week, however, the U.S. Senate passed a budget resolution declaring that the extension of the tax cuts from the 2017 act would increase the U.S. deficit by zero dollars. in other words, to assume that the current tax cuts in the 2017 act are permanent, even though many will legally expire by the end of 2025, they include them anyway.

The Senate’s budget resolution also authorizes $1.5 trillion in additional tax cuts, plus another $500 billion in new spending on immigration and defense. The $1.5 trillion in additional cuts would presumably allow for the passage of other tax measures proposed by President Donald Trump during his campaign: the elimination of income taxes on tips, overtime and Social Security benefits, as well as a new deduction for interest paid on car loans. Yet the Senate resolution provides for spending cuts of just $4 billion, despite allowing for total revenue losses of $5.8 trillion — $3.8 trillion from extending the 2017 act plus $1.5 trillion in additional tax cuts, plus $500 billion in additional spending. It's nothing more than a money grab since they control the House and Senate.

Instead of establishing sensible parameters for spending cuts, the Senate resolution calls for a $5 trillion increase in the national debt limit by this summer. In fact, Republicans have increased the deficit more than Democrats going all the way back to Calvin Coolidge. They only get deficit religion when Democrats are in office.

Click to expand...

And democrats don't want to extend the cuts because they need an issue. So they will oppose the continuation of the cuts, then blame it on Trump and the American taxpayers will have a huge tax hike. Democrats don't give a shit about everyday Americans.

Integrityrespec said:

And democrats don't want to extend the cuts because they need an issue. So they will oppose the continuation of the cuts, then blame it on Trump and the American taxpayers will have a huge tax hike. Democrats don't give a shit about everyday Americans.

Click to expand...

Personally the “tax cut” didn’t do me as much good as you want to believe.

I lost my itemized deductions and my job requires that I own expensive tools that need to be upgraded every few years.

Everybody I work with got hit HARD by this. Thousands. Not even close to covered by the temporary increase in standard deduction.

So no. I do not want the status quo to be maintained.

I don’t want to continue to see the right cry about the debt and then do the same thing they always do, hand out tax cuts to the wealthy and corporations, which directly increases that debt.

The very definition of insanity: doing the same thing over and over expecting a different result.

Or they know full well what they’re doing and just lie to us about it.

It’s one or the other.

Integrityrespec said:

And democrats don't want to extend the cuts because they need an issue. So they will oppose the continuation of the cuts, then blame it on Trump and the American taxpayers will have a huge tax hike. Democrats don't give a shit about everyday Americans.

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“Every day Americans”

Seems like the only folks seeing real tax cuts are NOT “every day Americans”.

At least in my 61 years, anyway.

The rich get the meat.

And we get the bones and are expected to grovel obsequiously.

Integrityrespec said:

And democrats don't want to extend the cuts because they need an issue. So they will oppose the continuation of the cuts, then blame it on Trump and the American taxpayers will have a huge tax hike. Democrats don't give a shit about everyday Americans.

Click to expand...

So, now you don’t care about the deficit and debt?

Pick a god damned lane.

Did the Senate decide to ignore the Senate Parliamentarian? I'm not seeing any indications of that yet, though I know they're planning on it.

Sounds like Johnson has the needed votes to pass the Senate blueprint today.

Good, now they can produce the actual bill. I wonder if we will actually see passage of Trump's big beautiful bill by early summer? They are rolling along faster than I expected.

Tensor101 said:

It's tax cut season in the Senate and here is what they are doing. Many of the tax cuts in the Tax Cuts and Jobs Act of 2017 expire at the end of this year. If Congress decides to extend these tax cuts for a decade, that decision would increase the U.S. deficit by at least $3.8 trillion and probably closer to $4.5 trillion, according to the conservative Tax Foundation.

Last week, however, the U.S. Senate passed a budget resolution declaring that the extension of the tax cuts from the 2017 act would increase the U.S. deficit by zero dollars. in other words, to assume that the current tax cuts in the 2017 act are permanent, even though many will legally expire by the end of 2025, they include them anyway.

The Senate’s budget resolution also authorizes $1.5 trillion in additional tax cuts, plus another $500 billion in new spending on immigration and defense. The $1.5 trillion in additional cuts would presumably allow for the passage of other tax measures proposed by President Donald Trump during his campaign: the elimination of income taxes on tips, overtime and Social Security benefits, as well as a new deduction for interest paid on car loans. Yet the Senate resolution provides for spending cuts of just $4 billion, despite allowing for total revenue losses of $5.8 trillion — $3.8 trillion from extending the 2017 act plus $1.5 trillion in additional tax cuts, plus $500 billion in additional spending. It's nothing more than a money grab since they control the House and Senate.

Instead of establishing sensible parameters for spending cuts, the Senate resolution calls for a $5 trillion increase in the national debt limit by this summer. In fact, Republicans have increased the deficit more than Democrats going all the way back to Calvin Coolidge. They only get deficit religion when Democrats are in office.

Click to expand...

Those blasted Democrats at it again, they want to give trillions to the folks who don't need it meanwhile main street is still waiting for prices to come down. The price of oil is dropping like a rock, why aren't gas prices coming down?

Integrityrespec said:

And democrats don't want to extend the cuts because they need an issue. So they will oppose the continuation of the cuts, then blame it on Trump and the American taxpayers will have a huge tax hike. Democrats don't give a shit about everyday Americans.

Click to expand...

Let's just get rid of taxes completely and see what America looks like by the time trump leaves office? Sound like a good idea? After all, it's your money, you worked for it why should the government steal it from you?

NWRatCon said:

That was the situating when Biden left office, and Obama, and Clinton.

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The debt increased by about 9 trillion under Obama, and about 6 trillion under Biden.

The US has a spending problem, and neither party will do anything about it, nor would you or I if we were in their shoes.

bongsaway said:

Let's just get rid of taxes completely and see what America looks like by the time trump leaves office? Sound like a good idea? After all, it's your money, you worked for it why should the government steal it from you?

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Yes! This is exactly what we should do.

aociswundumho said:

Yes! This is exactly what we should do.

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How long until our infrastructure just collapsed, or is that somebody else's problem?

bongsaway said:

How long until our infrastructure just collapsed, or is that somebody else's problem?

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We'll manage.

Trying to talk to MAGAnaughts about anything fiscal (really, anything) is like trying to explain quantum physics to a toddler - they're simply not equipped to handle it. Basic economics is beyond them: things like balance sheets; deficits vs debt; revenue streams; debt service; inflation; Treasury bonds - is like Greek to them. They don't even understand the Laffer curve, but they'll throw it into every discussion. You can make it as simple as possible, but they'll never "get" it, either because they don't understand or because they refuse to. I've given up trying.

aociswundumho said:

Yes! This is exactly what we should do.

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Why would we do that?