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Monday, October 30, 2017

Tax Reform: The Deficit Dust Storm Cometh

I am intrigued that Republican politicians are so very gung-ho on tax cuts stimulating the economy. They have the laboratory of Kansas under Republican Governor Brownback to look at and see the disaster his tax cuts have created.
Still, even with experimental data.... ideology precedes verification.

Whether a belief is true or not is irrelevant to its acceptance by a group. What matters is whether the belief is adequately "coherent" with the other previous beliefs the group holds.
It does not matter whether the beliefs are consistent. It does not even matter if they are contradictory. The group merely has to be able to live with the beliefs; the group merely finds them coherent, even though a belief B may be believed true under one set of circumstance - say "in time of war" - and that same belief B may be believed to be false under other circumstances - say "in time of peace".

Republicans believe that tax cuts are the remedy, even if they impoverished Kansas.

One of the excuses Sam Brownback used to explain his colossal failure was that in the early years of his plan some economic bad news beyond Kansas caused problems for the economy of Kansas.

Let's think about that.

Bad luck can always happen. Any good program ought to make provision for the rainy day, regardless of the starry-eyed faith of the ideologues.

When the USA cuts taxes, if there is a recession of modest proportions, there may be a pile of hurt. While we hurt, the tax cutters will maintain faith for a year or more, praying for rain like a Dust Bowl farmer.
Maybe rain; maybe not.

And for repatriation of corporate profits:
Adam Looney of the Brookings Institution took up the subject Wednesday, arguing that the repatriation of profits won’t help the U.S. economy because the money has already come back: “Given how we talk about these earnings, you could be forgiven for thinking U.S. companies have stashed their cash inside a mattress in France. They haven’t. Most of it is already invested right here in the U.S.”

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