Inspired by Mr. Mnuchin’s one-page analysis of the 400-page tax bill now sneaking its way through both houses of Congress on the strength of a probable one-vote majority, I am moved to offer my own one-page solution to our fiscal problems. It’s not the same as his.
Mr. Trump claims that high taxes have so tied the hands of business leaders that they have been prevented from the kind of reinvesting of their after-tax profits that normally would keep the United States economy growing and growing without limit, providing well-paying jobs for all citizens with skills in coal-mining, oil-drilling, fracking, cutting old-growth trees on formerly park service lands, and similar traditional blue-collar (but white-skinned) fields. He is particularly adamant that these high taxes need to be cut drastically on the high-earners who are presumably straining at the leash with shovel-ready projects from golf courses to hotels and weapons factories throughout the red states. Having been instructed by the boss to base his predictions on 10 years of uninterrupted 2.9% annual economic growth (a level attained only twice since the turn of the century), Mr. Mnuchin has kissed the ring and produced a rosy scenario in which the tax cuts will not only pay for themselves but show a surplus by the end of that stretch which could be devoted to reducing the national debt. Why 2.9? Why not 3.9, which would make every white person a millionaire? Only Donald Trump knows.
I have a simpler proposal. It’s called the Anti-Hoarding Act, which doesn’t even have to be voted on by Congress — it can simply be put in effect by having all of Mr. Trump’s “Make America Great Again” donors put their surplus cash to work.
According to the best sources I could find on Wikipedia, American companies are sitting on offshore piles of cash to the tune of 2.6 trillion dollars. You read that right — 2.6 thousand billions. They choose to not bring it home and put it to use at the moment, waiting for Mr. Mnuchin’s magical tax cuts to make it more tempting. They have an additional 1.9 trillion in domestic bank accounts, which they are sitting on in case of legal problems or natural disasters or opportunities to buy out competitors who are crippled by unforeseen events. That’s a total of 4.5 trillions sitting idle instead of contributing to economic growth. If it could be injected into our economy voluntarily by enlightened businessmen who believe in the theory of endless growth lifting all boats, it would have a greater effect than any conceivable tax cuts devised by Trump, Ryan, and McConnell and Co.
Just to give you some idea of how these numbers work, let’s assume that we could convince only half of these corporate hoarders to give it a try. That would instantly pump up the economy with two and a quarter trillions in ready cash. How much is that?
Well, the U.S. budget for 2018 is projected at 4.084 trillion, of which 3.654 trillion is expected to be paid for by current revenue sources. That leaves us with a deficit of 440 billions for the year.
Thirty-nine percent of that deficit, according to the budget accounts, can be laid to just three accounts : health (27%), education (3%), and entitlements including welfare (9%). They add up to 171.6 billion dollars. Assuming normal levels of growth instead of Mr. Mnuchin’s fairy-tale numbers, that repatriated cash, reinvested in the economy, could be used to eliminate the annual deficit entirely over the next 13 years, while the country’s businesses benefited from all the new profit opportunities opened up by newly flourishing activities.
What might happen if these entrepreneurial minded businessmen decided to repatriate the FULL four and a half trillion boggles the mind! We would be able to expand Medicare and Medicaid and finance single-payer health care and buy a few dozen more useless nuclear-tipped missiles for Big Rocket Man to threaten Little Rocket Man with without even breaking a sweat.
As a further benefit, this money, being from private sources and not government funds, would not be subject to the laws that forbid government investment in private entities. It could be invested in all sorts of high-return equities that would share in the guaranteed stock market boom, thus possibly doubling or even redoubling its effect. There might even be enough to establish a permanent slush fund to pay the lawyers who reach settlements with all the women who have suddenly found their nerves and their megaphones. The argument over whether such hush-money from taxpayer funds is illegal would become moot.
Sounds foolproof to me.
Vance Weaver 