No to the second question. The theory is to the extent that tax cuts stimulate the economy, the continued and/or increased growth that enables is better than the alternative of a crash or stagnation. You may argue that all the cuts go to the wealthy, but this is false, and even if they did, which they do not, the stimulus effect is still real.
Now you can buy that theory, or not. Some people may bet on flying pink unicorns, and it’s your right to bet against Milton Friedman if you wish. But the people in charge are going by the theory of people like Milton.
My concern with these tax cuts is that they won’t stimulate the economy because they’re too biased toward people who won’t spend the money. A large tax cut on lower and middle classes would stimulate the economy since the money would be spent.
At small scale, I come from a depressed Midwestern area.
They lowered/cut property taxes but only for rich corporations like Amazon, to bring them in. End result was massive increase in employment (like going from cornfields to warehouses everywhere) and wealth for locals, in a way that cutting for the middle class would not have done.
From an egalitarian standpoint I would prefer flattish taxes but from a practical perspective in my hometown regressive taxes have led to more prosperity. Although lots of billionaires are pure parasites, they're also often the ones making the largest capital investments and using tax and access to flow of capital to decide where to put it.
You’re describing targeted tax breaks and incentives as industrial development policy, which can work. I’m talking about broad tax cuts for the rich, including those in areas that do not have such problems.
These tax cuts are apparently to be paid for by deficit spending, which is insane. There is no way you could cut enough from the US budget to pay for them without winding down the entire US military and cutting things like Medicare and social security that people have paid into their entire lives. That’s wrong, and will cause riots.
Quebec Amazon warehouse recently was about to form Union and Amazon decided to shutdown the facility, citing other random reasons.
Suddenly 1700 jobs are lost.
Amazon is known to have cutthroat model be it internal warehouse and delivery employees or third party (they monitor third party delivery like a hawk monitoring its lunch).
I'm hoping there's a middle option where Government tax the super rich and stimulate local economies by creating infrastructure jobs.
Your weasel words (“directly”) indicate there’s no possibility of a satisfactory response for you so I’ll just note that it’s not so much debt decreases as decreases in the rate of debt growth, with the idea being that if the growth of the economy can outpace the growth of the debt, that’s better than the alternative. Let’s at least get the framing right.
I used “directly” because I am looking for evidence supporting the cause and effect relationship between tax cuts, such as those proposed by the current administration, and net positive debt effects (or increased government revenue). It’s a theory I find plausible but it isn’t convincing if it’s not supported by evidence. I figured you might have some particular evidence or metrics that convinced you.
If you're looking for examples in the real world, there are going to be multiple variables mixed in, such as spending cuts. If you want pure evidence, you could write a basic software simulation incorporating just the variables you earnestly want to understand the effects of.
The total of all federal employees salary is only 4.3% of the budget.
If you want to balance the budget using cuts you would have to make significant cuts to all of Social Security, Medicare, Medicaid, and the Military. These, along with net interest, are not only the largest areas of the budget, but also the ones increasing their share of the budget.
The biggest difference between the balanced budget of the 90s and today is the two large tax cuts pass by Bush and Trump. The reason you probably don't feel that you are paying significant less is because the lion's share of these cuts went to corporations and the upper class. As evidence by the expanding wealth inequality and share of corporate taxes.
In some ways debt can make us stronger. We issue bonds which the entire world wants to buy. This isn't like your household credit card debt. This is debt that fuels growth and investment in the United States. Partially, because of this we don't have to carry reserves of foreign currency or peg our dollar to another country. I don't know what the right amount is but low interest rates indicate the market does not consider this amount of debt to be problematic.
A better question is: what are we getting for our spending as a nation? Rather than pearl clutching at the amount.
What percentage of our spending going to service the national debt (in other words, to pay interest on the debt) would be too high for you, in your estimation?
Ideally zero. Deficit spending is really only excusable when it is being spent on investments that will offset the future cost.
Otherwise it is simply impoverishing future generations to benefit voters today, often enriching a small subset.
By way of example, going into debt get an education or buy a tractor might make sense. Going into debt to throw a party doesn't, especially when you plan to stick the cosigners with it.
In 2024 federal debt interest was 1.1 Trillion, with 4.9 trillion taxes, that is about 22% of revenue. Most of that interest goes into the pocket of wealthy US and foreign lenders.
