By: Katelyn Kivel
May 21, 2018
The Trump tax cuts are the rocket fuel propelling us toward the next financial crisis. That insight comes from Goldman Sachs.
Despite some shocking juxtapositions between what the Trump tax cuts were supposed to do and what they’ve actually done, a whole 27 percent of Americans still supported it as of an April poll.
“The US fiscal outlook is not good,” said Goldman chief economist Jan Hatzius this Sunday.
The Wall Street giant accused the Congressional Budget Office deficit estimates of being “optimistic,” and projected a more than doubled deficit, reaching more than $2 trillion dollars by 2028.
Worse still, Goldman warned that such a high deficit may prevent the government spending that tends to help ease the impacts of a recession. And a recession is coming. Goldman thinks one might hit in the next couple years, but a history of economic activity might make the International Monetary Fund call Goldman “optimistic.”
A study the IMF published in January thinks the next recession might come as soon as next year. And the looming threat of automation leaves us primed for a full-blown depression in the next decade.
Goldman isn’t optimistic about anything being done to rein in the deficit problems created by Trump’s tax plan, either. And the threats to cover that spending on tax cuts for the rich by cutting programs for the poor are in stark defiance of the fact that those programs helped people survive during the 2008 recession.
If you think it’s odd for Goldman Sachs to be raising the alarm bell about Trump’s tax cuts, you’re not wrong. Goldman execs have been prevalent in Trump’s orbit, even sitting in the room during the Syrian air strike last year. One of those execs, Gary Cohn, was instrumental in the design of Trump’s tax plan, serving as the President’s top economic adviser.
While he said he didn’t plan to leave the post after passing the massive tax breaks on the rich, Vanity Fair projected he’d return to the world of investment banking to reap the rewards of his work for Trump. Cohn resigned three months later. He’s looking at a possible future with a “digitized bank.”
After setting the table for a series of economic disasters projected by, among others, his former friends at Goldman, Cohn is going out to dinner with dimes he’s stopped investing in America.
Katelyn Kivel is a contributing editor for Grit Post in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.
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