Klinkerblle, the Revenue Fairy, has returned to Washington, D.C. You remember Klinkerbelle; she’s the one who sprinkled magic tax cut dust on President George W. Bush and got him to say that his 2001 tax cut would lead to a deficit reduction. It didn’t of course. Instead, it resulted in a revenue loss of $91 billion, the Department of the Treasury calculated.
Back in the 1980s, Klinkerbelle sprinkled her magic tax cut dust on President Ronald Reagan, causing him to make the same promise with the same result: a $201 billion deficit.1
Klinkerbelle made a side trip to Kansas a couple of years ago. She sprinkled that damn magic tax cut dust all over Governor Sam Brownback. States can’t run a deficit. When the revenue boom didn’t happen Kansas flirted with bankruptcy before the state legislature got the dust washed off.
Klinkerbelle is a supply-side fantasy, but unfortunately her magic dust never delivers anything but deficits.
That doesn’t stop politicians – almost always Republicans – from falling for Klinkerbelle’s tricks over and over again.
The latest victim is Secretary of the Treasury Steve Mnuchin. He announced, under the influence of Klinkerbelle, that the Trumpster’s proposed tax cuts would reduce the deficit. “We think this tax plan will cut down the deficits by a trillion dollars.”
The nonpartisan Committee for a Responsible Federal Budget, which doesn’t believe in Klinkerbelle, has estimated the tax plan would reduce revenue by $2.2 trillion over 10 years. (Including additional interest on the debt, CRFB estimated the deficit would increase by $2.7 trillion.
Plainly, Secretary Mnuchin is guilty of attempted operation of a federal government while under the influence of magic tax cut dust. If it isn’t a crime, it should be.
The Washington Post gave Secretary Mnuchin its Four Pinocchios award. WC would give him a clout alongside the ear.
Ironically, Republicans are supposed to be deficit hawks. Unless, apparently, they’ve cuddled up to Klinkerbelle.
- The revisionists have been gnawing on this. According to the Washington Post, William A. Niskanen, chairman of Reagan’s Council of Economic Advisors, co-wrote a paper in 1996 that defended Reagan’s economic record but also said it was “an enduring myth” that Reagan officials believed tax cuts would pay for themselves. “This was nonsense from day one, because the credible evidence overwhelmingly indicates that revenue feedbacks from tax cuts is 35 cents per dollar, at most,” Niskanen wrote, noting that “the Reagan administration never assumed that the tax cuts would pay for themselves.” ↩