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Critics argue that President Trump’s New Fund for American Greatness budget proposal is based on flimsy mathematics.
President Donald Trump’s new budget contains a huge data processing error where the same money is used twice for two different purposes. On this basis, an inflated projection of 3% of GDP would be the same as the presidential budget predicts an increase in federal revenues of about $ 2 trillion perover the next decade, which would then be used to apply “plus Trump’s biggest tax cut in history.”
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But then that same $ 2 trillion is used to balance the corresponding budget.
White House Manager Mick Mulvaney decided not to deny the calculation and said it was done “on purpose” at a press conference on Tuesday.
“I am aware of the criticism and should usually go back and say that there are a few more places where we are likely to be careful in our accounting,” he said. “We position ourselves in numbers.”
“We thought the idea of making the budget reform deficit neutral was the most sensible of our three options,” he said.
Treasury Secretary SteveMnuchin, when asked about the economic escape at an economic conference on the same day, replied: “This is the first document that needs to be finalized.”
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“Using Growth Income to Reduce Deficits,” the impartial For-Panel wrote to the responsible federal budget, “is inconsistent with recent claims that economic growth will be used to fund taxes.” reform. “
Former Treasury Secretary Larry Summers wrote a different strategy on his blog: “I feel like this is the most egregious accounting mistake made by the presidential budget in nearly twenty years I’ve followed it.”
President Trump’s tight budget includes a blatant, critically acclaimed accounting error that has led toA $ 2,000 billion security check, even though the White House said it was sticking to the count.
According to the budget released on Tuesday, the changes in tax spending proposed by the Trump administration will spur economic growth enough to reach $ 2 trillion in spending by 2027. means that the money will probably already be used to pay for the money lost as a result of the tax cuts.
Former Treasury Secretary Lawrence Summers calls this oversight a “rudimentary double counting” but also “a logical fallacy of the kind that would justify a student’s failure in this introductory course. Economics, “in a commentary to the Washington Post.
In a public conference on Tuesday, White House budget founder Mick Mulvaney dismissed the criticism, saying he simply assumed that the tax method eventually passed by Congress would automatically be revenue neutral.
“We support any number,” he said. “We doomOr that their assumption that tax reform will generally be deficit neutral is best of the three options currently available to us. ”
The idea that tax cuts will pay off for everything has been discounted. This has been a staple of Republican tax rhetoric over the years, with lower tax rates triggering an economic boom that minimized lost income, but economists can often exaggerate the idea.
According to the Committee on a Simple Responsible Federal Budget, for Trump’s tax cuts to pay off, the economy will need to grow 4.5% much faster than in the next 10 years. That’s more than half the growth rate projected by the Congressional Budget Office.
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So what’s the most likely outcome of Trump’s plan? The bipartisan group expected tax cuts to cost the government $ 3-7 trillion more than it would over the next decade.
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