Evidence is mounting that the $1.5 trillion tax-cut package enacted in December by congressional Republicans and President Donald Trump was a bad idea, not only for the long-run health of the economy but for the short-term political prospects of the GOP.
On April 17, Tax Day, White House economic adviser Larry Kudlow rejected reports from the Congressional Budget Office that Decembers Republican tax cut bill would raise the national debt by $1 trillion over a decade. He told Fox News, Never believe the CBO. Very important. Never believe them.
Then how about believing economists at the investment bank Morgan Stanley or the International Monetary Fund? In separate reports issued on Tax Day, they predicted that the benefits of the tax cut would largely blow themselves out in two years, after which an economic downturn is likely. And because of deficits created by the tax cuts, they said, Congress will have fewer options for nudging the economy out of recession with stimulus spending.