WHAT are Republican lawmakers in politics to achieve? Not many years ago, at the peak of their outrage over Barack Obama’s economic stimulus package, “balanced budgets” might have featured in the answer. But the frenzied passage of the Tax Cuts and Jobs Act through Congress has revealed the insincerity of the party’s fiscal moralising. Republicans in Congress do not oppose government borrowing when it suits them. Rather, the overarching policy objective that unifies them is cutting taxes—and damn the fiscal consequences. Following the passage of the tax bill through the Senate in the early hours of December 2nd, Republicans are on the brink of achieving their goal.
On November 30th budget scorekeepers unveiled a forecast for how much extra economic growth the tax bill might spark: enough to pay for about one third of its $1.5trn cost. Previously, Republicans might have viewed this projection as a triumph. They have long pressed for budget forecasts to include such “dynamic” effects (see blog). But the score briefly...Continue reading
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