A few weeks ago, I took a dim view of President Trump’s tax proposal:
The true level of taxation is the government’s spending level. All spending must be paid for, one way or another. There are 3 possibilities.
1. Overt taxes.
2. Borrowing. This is a covert tax, a tax on the future (when either the debt must be repudiated, or more and more government revenues must be diverted to servicing it).
3. Money-printing. Another hidden tax, this time on the real value (the purchasing power) of everyone’s wages and savings. Also known as “inflation”.
So really, it isn’t a tax cut unless it’s a spending cut also. Trump wants to cut the overt taxes. So, what? Without spending cuts, it’s only a corresponding increase in the hidden taxes: borrowing and/or money-printing.
I gotta give credit where it’s due. It looks like Trump is going to propose spending cuts?
More details from President Donald Trump’s first budget proposal are trickling out via a flurry of overnight reports from The Washington Post, Associated Press and Bloomberg News…
The budget will slash $1.7 trillion in spending on entitlement programs, according to Bloomberg.
Trump’s budget will include a massive nearly $200 billion cut to the Supplemental Nutrition Assistance Program, the modern version of food stamps, over the next 10 years – what amounts to a 25% reduction, according to The Washington Post.
The food stamp cuts are part of a broader $274 billion welfare-reform effort, according to a report by The Associated Press.
The budget calls for about $800 billion in cuts to Medicaid for fiscal year 2018, WaPo reported.
The budget is also expected to propose major domestic discretionary spending cuts – an earlier version of the budget called for $54 billion in such cuts next year alone.
Whether the Republicans in Congress will tolerate any cuts, is another matter.
Note that these cuts are hardly draconian. OK, the numbers sound large. But only because:
- some of the numbers are totals across many fiscal years, and
- the government IS large. Spending and promises (entitlements) skyrocketed under Bush 43 and Obama.
But the Controlled Media is sure to make them sound like the Entropic Heat Death of the Universe.