255
To Pay for Trump Tax Cuts, House GOP Floats Plan to Slash Benefits for the Poor and Working Class
(www.propublica.org)
this post was submitted on 02 Feb 2025
255 points (99.2% liked)
politics
20522 readers
4901 users here now
Welcome to the discussion of US Politics!
Rules:
- Post only links to articles, Title must fairly describe link contents. If your title differs from the site’s, it should only be to add context or be more descriptive. Do not post entire articles in the body or in the comments.
Links must be to the original source, not an aggregator like Google Amp, MSN, or Yahoo.
Example:
- Articles must be relevant to politics. Links must be to quality and original content. Articles should be worth reading. Clickbait, stub articles, and rehosted or stolen content are not allowed. Check your source for Reliability and Bias here.
- Be civil, No violations of TOS. It’s OK to say the subject of an article is behaving like a (pejorative, pejorative). It’s NOT OK to say another USER is (pejorative). Strong language is fine, just not directed at other members. Engage in good-faith and with respect! This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban.
- No memes, trolling, or low-effort comments. Reposts, misinformation, off-topic, trolling, or offensive. Similarly, if you see posts along these lines, do not engage. Report them, block them, and live a happier life than they do. We see too many slapfights that boil down to "Mom! He's bugging me!" and "I'm not touching you!" Going forward, slapfights will result in removed comments and temp bans to cool off.
- Vote based on comment quality, not agreement. This community aims to foster discussion; please reward people for putting effort into articulating their viewpoint, even if you disagree with it.
- No hate speech, slurs, celebrating death, advocating violence, or abusive language. This will result in a ban. Usernames containing racist, or inappropriate slurs will be banned without warning
We ask that the users report any comment or post that violate the rules, to use critical thinking when reading, posting or commenting. Users that post off-topic spam, advocate violence, have multiple comments or posts removed, weaponize reports or violate the code of conduct will be banned.
All posts and comments will be reviewed on a case-by-case basis. This means that some content that violates the rules may be allowed, while other content that does not violate the rules may be removed. The moderators retain the right to remove any content and ban users.
That's all the rules!
Civic Links
• Congressional Awards Program
• Library of Congress Legislative Resources
• U.S. House of Representatives
Partnered Communities:
• News
founded 2 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Reminder that taxes do not fund spending. They do not need to “offset” the tax cuts by reducing benefits. They simply want to do both.
So taxes exist just to make money disappear?
According to MMT, they serve to maintain currency demand.
All these elite tax cuts undermine the system described by MMT, however
Taxes primarily exist to create demand for the currency.
Let's say we're starting a new club with 100 members. We've got 5 big projects for this month, and we want to make sure all the members pitch in.
So we say: a month from now, everyone will turn in 10 "I helped!" stickers. If you don't, you're out of the club.
Then we hand out maybe 1500 "I helped!" stickers total to the leaders of the projects, to make sure there's enough to fill the demand for 1000 stickers since we know some will do more than others and end up with more than 10 stickers.
The leaders delegate the work out to other members, giving them stickers along with their assignments. Some members end up having scheduling conflicts, so they trade assignments between each other along with the corresponding bounty of stickers.
The month ends, everyone turns in their stickers, and we start all over again.
Notice a few things:
So taxes are important for giving people a reason to contribute and do something for each other, controlling inflation, and making sure wealth stays somewhat evenly distributed. But they're not a prerequisite for spending.
I think that while the relationship between tax revenue and spend can be fuzzy, there's only so far you can push printing the "I helped!" stickers without regard for the amount coming in before it all breaks down. Part of the value of those "I helped" stickers is knowing that the authority doesn't just print up a few quadrillion because they felt like it, and that the volume of incoming and outgoing "stickers" is at least somewhat in the ball park of comparable, and any deviation between the two at least be steady and predictable and thus subject for planning.
Yep. That was point three here:
Deficits still matter, they just don't matter in the same way that we usually see in the media when they talk about "revenue" and "spending taxpayer dollars".
Given that, I think the claim that there is zero need to offset spending would be pushing it too far. It might not be as simple as a naive interpretation and somewhat more flexible, but it still has a rather significant relationship that shouldn't be neglected.
Just print more money to pay for everything, hur dur, taxes are a scam!
Taxes are massively important. They're just not the source of the government's money, which... yeah, is... printed. It even says so on the bills.
MMT is definitely one theory of federal spending. But it tends to neglect the impact of a growing money supply on a constrained real economy. Right now, we're doing a kind-of privatized MMT via Saudi investment. What its creating is a lot of dogshit MMA spin-offs and failed desert cities. Also, its creating a hugely inflated share price for Musk properties.
Without anything to offset Saudi spending, we're watching the global media, resource surplus, and labor force bend towards doing whatever the fuck MBS happens to want to do at a given moment. A proper modernized global taxation system that limits what a single individual can own would have curbed these excesses significantly. What's more, it would free up resources and labor (and declutter our gish gallop media) for more socially beneficial projects.
Where MMT stumbles is in how it aligns real material limits of the economy with a matching money supply. Just injecting more cash into the system doesn't produce more labor/materials ex nihilo. It only draws them from the global stockpile. If your public sector is playing tug-of-war with a better-funded private sector, it will appear to cost more and produce less than its privatized peers.
That's ultimately why you need taxation. Not to fund via cash but to free up surplus goods for public appropriation via shrinking the money supply.
Yeah, MMT is not a prescription for how to behave going forward. It's just an account of how money has worked so far. We're seeing international robber barons take shape, and I don't think there are good historical examples of how that ends up functioning and what our options are for handling it.
I'd argue that MMT not having an answer for relating the "real economy" to a specific monetary policy is actually a good thing, because it keeps it descriptive instead of prescriptive, but you're right -- the obvious next step is "Okay, so, if balancing the budget is not a good metric, then what is?"
Stephanie Kelton's answer is to look at the state of the real economy and make decisions that way. It's... a very tall order. There are massive organizations dedicated solely to getting a clear picture of the real economy of a single sector.
You might spot 10 functions that appear under-utilized, so you fund those and expect to see a return, but they're really constrained by one small thing, and once you fund that thing then those 10 functions roar to life and get into a bidding war and wreck pricing for that little pocket of the economy.
But it's worth noting that these problems exist right now, we just aren't paying attention to them because we spend more time trying to chase the dragon of austerity instead of taking a single minute to talk about utilization.
Balancing the budget is a good metric when its rooted in material needs.
When individual sectors are carved up into privately administered and obscured subcomponents, its difficult, true. But when you've got a large vertically integrated conglomerate, it is comparatively easy. Walmart, Amazon, and Exxon all managed to organize administration of an end-to-end supply chain where they can claim profit at every step of the economic process.
We've seen more transparent and well-integrated economies apply these tools holistically. Allende's Chile implemented Project Cybersyn with enough early success that the incoming Pinochet government decided to obliterate the system rather than admit it's effectiveness. Deng's China and Sankara's Burkino Faso and Castro's Cuba all managed to integrate their domestic economies in a central model that boosted productivity and dramatically reduced poverty.
The idea of austerity is always rooted in the theory of private investment as a galvanizing force for growth. But even when your country is relatively small, the investment you can engineer through public sector collaboration regularly outpaces the growth you can obtain from an injection of overseas capital. When your country is large and diverse, public sector programs that integrate regions - most notably the shipping lanes and rail networks and canal projects and data pipelines drastically reduced cost of transit during the last 300 years - promise enormous returns for relatively small investments.
Gotta give credit to modern logistics where it is due. Any austerity program that eats away at our ability to cheaply and easily transfer materials and labor will cost more than it yields in the long run.
Are you by any chance also talking about how dumb Trump voters must be? Yikes.