My apologies to drunken sailors!
No, Tax Cuts Are Not Driving Deficits — It’s The Spending, Stupid
Are President Trump’s massive tax cuts what’s driving federal deficits upward. Everyone says so. But, it’s not true. It’s just a way for lawmakers to distract the public while they crank up the spending machine. Just like the Senate did this week.
“People are quick to blame deficits on tax cuts, but I don’t buy that,” he said. “The gap is principally spending too much.”
You could almost hear the jaws dropping among the Washington pundits and budget “experts.”
How could Kudlow make such a ludicrous claim? Everyone knows that Trump’s $1.5 trillion tax cuts are fueling the increase in deficits. What explains why this year’s deficit is running higher than last year’s?
If anything, Kudlow could have been more emphatic. The deficit gap isn’t “principally” because the federal government is spending too much, it’s entirely due to spending.
How do we know that?
Each month the Treasury Department releases its tally of federal spending and revenues. The most recent data are through the month of August. Since the federal government starts its fiscal year in October, the latest report includes all but one month of the 2018 fiscal year.
What do the data show?
Through August, the federal deficit topped $898 billion. Over the same period last year the deficit was $674 billion.