Revenue-neutral tax reform? That's so passé. It's much easier to practice make-believe economics: Our view

The Editorial Board | USA TODAY

Show Caption Hide Caption GOP wants vote on Senate tax plan this week Republican members of the Senate Finance Committee, after a White House meeting with President Donald Trump and Vice President Mike Pence, say they are planning a vote this week on their tax overhaul plan. (Nov. 27)

It’s official. Concern about government’s unsustainable borrowing is dead. Fingerprints from both parties are at the crime scene.

The clearest and freshest evidence is the Republican package of tax cuts, scheduled for a Senate vote this week, that would raise the national debt by $1.5 trillion over the next 10 years — and perhaps considerably more if "temporary" reductions for individuals become permanent.

Republicans, you might recall, used to hold themselves out as the party of fiscal responsibility. Less than a decade ago, they were outraged by a Democratic stimulus package increasing the debt by $787 billion, or about half the latest tax plan.

OPPOSING VIEW: Deficit driven by uncontrolled spending

Now their concern for financial sanity has been muted by a rush to pass tax cuts in a bid to have some — any — accomplishment to take to voters. Revenue-neutral tax reform? That's so passé. It's much easier to practice land-of-make-believe economics, in which tax cuts supposedly pay for themselves.

Meanwhile, some Democrats have begun an implausible effort to claim the moral high ground on the debt issue. While it is true that the Democratic Party did show some spine a quarter-century ago, when it backed deficit reduction plans that led (briefly) to balanced budgets, the party is now far too enamored of social spending for its positions to be anything put posturing.

This would not be the first time the two parties have essentially switched sides.

They have routinely done so over judicial vacancies. They have also passed the issue of federalism — giving power to the states — back and forth like diners sharing a plate of nachos.

At the moment, Republicans are in control in Washington and are therefore intent on punishing localities deemed insufficiently concerned about illegal immigration. During the Clinton and Obama administrations, Democrats ran roughshod over states on everything from gun laws to the rights of transgender students.

The flip on the deficit would be the most consequential. Including liabilities to Social Security, the federal government owes $20.5 trillion. As a percentage of economic output, the national debt is almost as high as it was during World War II, when an existential threat warranted a temporary surge in spending.

Now, the debt has kept going up at a time of relative peace and prosperity, and as health care and retirement spending is set to surge with the Baby Boomers’ retirement. Even without a tax cut, the Congressional Budget Office projects that annual deficits will rise from $563 billion in fiscal 2018 to more than $1 trillion by 2022.

It's bad enough that neither party has addressed this problem. It's worse that one party is pushing so hard to make the problem bigger.

Some time in the next decade, the United States might well face the kind of debt crisis that nations such as Greece have suffered recently. Currency markets and creditors could turn against U.S. debt as swiftly and savagely as they turned against Wall Street’s mortgage products a decade ago.

If that happens — leading to draconian spending cuts, punitive tax hikes and years of inflation or stagflation — Americans will look back at this death of fiscal sanity. Their response is likely to be unbridled anger and contempt for those who brought it about.

USA TODAY's editorial opinions are decided by its Editorial Board, separate from the news staff. Most editorials are coupled with an opposing view — a unique USA TODAY feature.

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