Perfect that Trump signed bill-left town & has already arrived at Mar-a-Lago when THIS estimate hits

[kpete]

Oh man.

The new JCT analysis is in (after Rs passed their tax bill, naturally).

Result:

Average increase of 0.7% GDP

$1 trillion in deficits even accounting for growth

Link to tweet

[progree]

1. And the Federal Reserve will raise interest rates at a faster pace to compensate

When growth picks up, the Fed jumps in with interest rate increases to "cool" the economy back down. I bet that's not factored into the JCT analysis.

[Ilsa]

3. I'm anticipating inflation and rate increases.

Any extra money will be used to reduce any variable-rate debt.

[Lucky Luciano]

9. Exactly right. Perhaps more curve flattening too as a recession may eventually occur. nt

[unblock]

2. how are they even figuring as much as a 0.7% gdp increase???

seriously, at a time when the economy is not in recession, at a time when the investment community has more cash than it knows what to do with, at a time when corporations have more cash than they know what to do with?

someone's going to start a business because their tax rate is now 37% instead of 39.6%?

horsehockey. most corporate money will be going to shareholders, and most shareholders and otherwise rich people will reinvest any extra money mostly overseas.


if anything, the deficits will cause *government* spending to slow or even decrease, which would *contract* the economy.



personally, i think the government recovering that much of the revenue due to a more juiced-up economy is highly optimistic.
that's not to say the economy won't grow -- i'm not predicting a recession just yet -- i'm just saying that this tax heist nonsense isn't going to have much to do with it. it's still obama's economy.

[thesquanderer]

4. re: "someone's going to start a business because their tax rate is now 37% instead of 39.6%"

no, but if you start a business and structure it as a pass-through (which is what most small businesses do today anyway) your tax rate is now down to 21%.

[unblock]

6. I can see a whole lot of people restructuring their compensations

To take advantage of this (lowering revenues even more) but not many creating actual economic activity that they wouldn’t have otherwise.

Even if the rate is only 21%.

[TexasBushwhacker]

14. Let's not forget, pass through income isn't subject to

Social Security and Medicare tax, so you better believe they'll be restructuring.

[Bengus81]

11. That's what they did in Kansas in 2013 when Brownback and Republican thugs in the State

House and Senate passed a ZERO % tax rate for Corporations/LLC's/S type etc. So what happened,NOTHING. There was certainly a flurry of new Corporations,not from out of State but just partnerships and others quickly forming a LLC for $100 bucks or less on-line.

There was NO growth,no big spurt of hiring,increased wages there was NOTHING but a State that about went BK in four years. That SHAM tinkle down was reversed last fall after 4.5 years and we're nearly $900 million in the hole because of it.

But....Donnie just KNOWS it will work on a National basis. BULLSHIT.......

[sandensea]

13. Or a 4% decline.

That's what Dubya left behind, after all.

I might add that this 4% decline was arrived at by estimating inflation at 1%. The real inflation rate during the last year of the Dubya regime was closer to 16%.

[Honeycombe8]

5. That must be fake news!

[dflprincess]

7. Original speculation was that he would sign it at Mar-a-Lago

Apparently someone convinced him that it was that kind of imagery that got the tsar in trouble.

[Eyeball_Kid]

8. It's all too weird.

What we haven't been hearing about is any change in CONSUMER SPENDING. That, I understand, is what drives the economy. And my ear to the ground hears that this tax law is not what consumers want to hear. It's an overall dampening of the national economic mood, not a leaping jubilee that GOPers want to characterize it. Folks are going to remember that if there IS any economic benefit, it will be negated by other tax liabilities AND an increase in health care costs. IOW, for the working and middle classes, the tax law is a nothing burger in the first year, and after that, it's a spleen sandwich. The overall impact on consumer spending will be negative, IMO. Watch what happens.

[SergeStorms]

12. Well the Trumptards....

are overjoyed with the "tax scam", and are falling all over themselves trying to figure out ways to spend their $700-$800 a year. Maybe they'll "buy a new car, or get their kitchen remodeled", as some Trump administration assclown suggested.

Weren't the RepubliCONS counting on a 3%+ jump in growth each year to make this "tax scam" spending neutral? It's all part of their grand plan to bankrupt the government. Boy, did they pick the right asshole to run the country into bankruptcy. Trump is a real Pro when it comes to that.

[Nictuku]

10. I thought he was going to wait until 2018

I had seen something on Now This saying there was a sneaky reason they were putting off signing it until 2018 having to do with the mid-terms, So if he was going to sign it, I guess it is good he did sign it in 2017 (worst year on record as far as I'm concerned).

https://www.facebook.com/NowThisPolitics/videos/1838271076204374/

(don't know how to post facebook videos)

[iluvtennis]

16. I read that also with the reason that GOp didn't want the auto cuts to Medicare and Social..

...Security to go into effect.

http://fortune.com/2017/12/21/trump-signs-tax-bill-january/

Why wait? House Republicans left the PAYGO provision out of a year-end spending deal to avoid a government shutdown before Friday. PAYGO, or pay-as-you-go, is a budget rule requiring that tax cuts as well as increases in mandatory spending and entitlement programs like Medicare and Social Security must be covered by tax increases or cuts in mandatory spending, according to the Tax Policy Center.

By leaving out the provision, automatic cuts to Medicare and other mandatory spending programs would be activated by the tax reform bill in January because the bill increases the deficit by $1.5 trillion over 10 years. Waiting to sign the bill would delay those cuts until 2019.

[pangaia]

20. So, will there be cuts to Medicare and SS soon?

[onenote]

21. No. The short term spending bill contained a pay go waiver

that cures the automatic cut issue.

[pangaia]

23. Thanks

[bucolic_frolic]

15. Inflation caused by stimulating a full employment economy will grow those deficits big time

This is the stupidest most selfish thing Congress has ever done.

[Fred Sanders]

19. It is the opposite of good policy to stimulate a robust economy. It is cover to engorge the rich.

[Achilleaze]

17. the republican Draft-Dodger-in-Chief is now dodging the reality & responsibility

of the humongous turd that he & his republican cronies have plopped into America's punch bowl.

[pangaia]

18. Over my head..

May I ask.. simply..
1- Is this 'good or bad? If there is such a thing
2-When and to whom will cuts in Medicare and SS start?
3-Will my T-Bills still be as safe as they were?


Jeeze, I'm selfish...

Thanks kpete.

[onenote]

22. As noted above, there will be no automatic cuts

because the bill was signed this year. The pay go problem was addressed through a waiver in the short term spending bill.

[pangaia]

24. Thank you..