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The Trump ‘economic miracle’

RICHARD MORRIS

Williamsport

Many are touting the Trump era’s economic growth, and most agree that the Trump tax cuts helped fuel it.

Oddly, the growth generated by those cuts proves the validity of liberal, demand side, a.k.a. Keynesian Economics.

J.M. Keynes argued that tax cuts and government deficit spending increase economic growth because they put money into people’s pockets. When taxpayers’ money is invested, it increases demand for goods, which in turn drives up economic production and growth.

In November 2017, Paul Ryan, the Republican speaker of the House, said the Trump tax cuts will increase a family of four’s income by $1,182 in 2018.

I believe that increase in spending power is helping to drive economic growth.

However, those tax cuts have also increased the federal deficit.

Between Jan. 1, 2018, when the cuts began, through Sept. 1, 2018, the federal deficit was $210 billion larger than during the same eight months of 2017.

At that rate, the federal deficit will grow by $314 billion this calendar year.

That is $981 per American, or $3,924 for a family of four. In other words, if a family of four enjoyed Paul Ryan’s income increase of $1,182, that family did so in exchange for a debt of $3,924.

Since the government’s debt must be paid back by taxpayers, taxes will have to be raised or spending will have to be cut in the future to balance the budget and pay off the debt.

This raises certain questions.

Whose taxes will be raised?

What programs will be cut?

Which party is likely to put the tax burden on the wealthy who are most able to bear it?

Which party is most likely to cut programs like Social Security and Medicare to offset the rising deficit?

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