You can say one thing about the Democratic Party’s messaging: At least it’s consistent.
Ever since the GOP passed its landmark tax reform bill in 2017, left-wing critics have employed the same refrain every time budgetary issues come up: Republicans have no credibility to invoke debt concerns because they voted for the tax cuts supposedly causing our upcoming $1 trillion annual deficit in the first place.
The New York Times’ famously wrong-headed economist and columnist Paul Krugman is the latest to peddle in this misleading spin. In his recent column headlined “Deficit Man and the 2020 Election,” Krugman writes that “the first thing you need to know is that the Trump tax cut caused a huge rise in the budget deficit, which the administration expects to hit $1 trillion this year.”
Essentially, he’s wrong from the outset.
Krugman isn’t the only one making this claim. Democratic presidential candidates often invoke the tax cuts when asked how they’ll pay for their expensive plans, and just last week, Sen. Rand Paul was unfairly smeared as a hypocrite for invoking budget concerns to delay a vote, just because he voted for the tax cut in 2017.
But tax cuts don’t cause the deficit to increase, that is, unless our elected officials continue to spend money they no longer have available. While it is true the GOP bill will substantially decrease tax revenue over the next decade compared to what would have been the status quo, the reality remains that the only reason we’re still piling up debt is because Washington can’t get its spending under control.
Even if the Democrats’ worst case scenario projections were true, the tax bill would still not be the main factor behind our annual deficit. At the absolute most, using the highest available estimates, the tax cut will decrease revenue by $1.9 trillion over a decade.
Divided across 10 years, that’s an annual windfall of roughly $190 billion. Seeing as our current budget deficit is $1 trillion, that leaves $810 billion in debt incurred annually unrelated to the tax cuts.
In other words, the “main cause” Democrats want to blame for our deficit woes is, at most, 19% to blame. So how should we address our looming debt crisis?
One place to start is with rolling back our military spending. The U.S. spends roughly $650 billion on our military every year, which according to the Peter G. Peterson Foundation, is more than China, Saudi Arabia, India, France, Russia, the United Kingdom, and Germany — combined. Properly funding the military is important, and the national defense is the core function of government. But we could easily scale our spending back to, say, $400 billion a year, and cut hundreds of billions off the annual deficit while still outspending our rivals.
Yet ultimately, this won’t be enough. As my colleague Tiana Lowe has written at length, it’s our entitlement programs that have us on the path toward financial crisis. She writes:
Digging deeper: Deficit will rise by $1.4 trillion between 2018 & 2029. Yet the cost of tax cuts & disc. cap increase will level off (if extended). The key driver moving forward is General revenue transfers to Social Security & Medicare
2018 – $396 billion
2029 – $1,681 billion pic.twitter.com/MRsMw0c8Jd— Brian Riedl (@Brian_Riedl) January 28, 2019
No matter how much left-wing newspaper columnists or aspiring Democratic politicians protest, never forget, it’s spending, not tax cuts, that is sending our financial future spiraling toward the red.
