Seventeen years ago, President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001, the first of two significant tax cuts under the Bush administration.

The tax cuts ended three years of surplus budgets under President Bill Clinton and, contrary to its name, did not give us “economic growth.” Instead, by the end of the Bush administration, the United States was thrown into the Great Recession of 2008. Unemployment eventually increased to 10 percent in 2009, significantly higher than the 4 percent Bush inherited from Clinton.


In 2017, President Donald Trump inherited Barack Obama’s economic recovery and 75 consecutive months of job growth. But he has not done much to keep the economy on track for the future. Instead, he is depleting the work force with deportations, especially for farmers, construction workers and service providers; making it more difficult for people to purchase health care insurance; increasing our nation’s trade and budget deficits; and starting a trade war which will increase prices on dozens of American-made products. According to Akin Oyedele of Business Insider, a tariff on steel and aluminum, for example, will negatively impact 16 manufacturing jobs for every one steel and aluminum job saved.

Like Bush, Trump told us that the U.S. economy would absorb his $1.5 trillion tax cut and that the tax cut would be an enormous stimulant to the economy. Not so, it appears. William Watts writes for that the recent stock market volatility is a reaction to current “fiscal policy” related to the enormous tax cuts. Nicholas Colas of Data Trek Research writes that the tax cuts were “dangerously inflationary” and has contributed to a Treasury market selloff.” Colas added that investors have “taken stock of the full effects of tax reform. And they don’t like what they see.”

Trump’s first year (2017) trade deficit was worse than any year during Obama’s eight years in office. It seems that his verbal trade war with friends and foe alike have made things worse, not better.

The annual budget deficit and cumulative national debt have also increased under Trump, and we haven’t even begun to pay for the $1.5 trillion tax cut yet. The Treasury Department announced recently that the government needed to borrow nearly $1 trillion in 2018, double what had to be borrowed during Obama’s last budget. The Congressional Budget Office blamed the deficit increase primarily on a decrease in revenue — a direct result from the tax cut.

Trump likes to brag about companies giving their employees $1,000 bonuses in response to his tax cut. In fact, many companies, like Walmart, for example, limited the $1,000 bonuses to employees who have worked for the company at least 20 years. The New York Daily News reported that the average bonus for Walmart’s 2.1 million employees worldwide was actually about $190. On the same day as the bonus announcement, Walmart announced plans to close 63 Sam’s Club stores.

Other retailers have also tied the $1,000 bonuses to employees with a tenure of 20 years or more. According to the Bureau of Labor Statistics, however, the median tenure for retail workers is about three years.

Trump announced that he was going to invest $1.5 trillion to rebuild America’s infrastructure. What Trump failed to mention is that the federal government’s contribution would be only $200 billion. The rest ($1.3 trillion) would have to come from state and local governments. Of course, states and local governments don’t have this kind of money as they depend upon the federal government for 80 percent of funding for projects like roads and bridges. So while Trump was bragging about a $1.5 trillion infrastructure investment, he has actually proposed cutting the federal government’s share of construction costs and placing the burden of our nation’s infrastructure on states and localities.

Imagine if, instead, Congress invested the $1.5 trillion tax cuts directly into infrastructure projects around the nation. That would have stimulated state and local economic development, and put money into the hands of working Americans instead of billionaires.

Trump could have focused the tax cuts on the middle class instead of the rich. Thus, instead of Speaker Paul Ryan’s secretary getting an extra $1.50 in her paycheck, she might see a real increase in her take-home pay that makes a real difference in her life and her family.

Significant tax cuts are necessary when the economy needs a stimulus and when unemployment is high, as it was during the Great Recession. A major tax cut, mainly for the rich, when the economy is growing and unemployment is at 4.1 percent, is reckless economics.