Tuesday, December 08, 2015

Not that anyone cares any more about the Jeb Bush tax plan as such, but ...

According to an analysis by the Tax Policy Center, the Jeb Bush tax cut "plan" would yield a static revenue loss of $6.8 trillion over ten years. However, refining the estimate to include feedback effects and annual interest costs raises, rather than lowers, the projected effect on national debt - to $8.1 trillion over 10 years and $22 trillion over twenty years. This reflects that, absent very large spending cuts that have not been specified by the Bush campaign, there would both be huge interest costs from the higher annual deficits, and fiscal drag from the increased public debt overhang. This would apparently outweigh, in the estimate, the dynamic effects of lowering current-year tax burdens on work and saving.

Obviously, who cares about the Bush tax plan as such as this point. It's not as if the poor guy actually has any sort of a chance to win any elected office higher than dogcatcher.  But given that all other Republican candidates are essentially offering larger versions of the same thing, this is indirectly relevant. It suggests that, if a Republican wins the presidential 2016 election (and retains control of both the House and Senate, as one would expect), there will be a high likelihood of the U.S. budget's going down the path of Kansas, or perhaps even Greece.

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