by Pam Martens and Russ Marten, Wall St On Parade:
On April 20 of this year, U.S. Treasury Secretary Steven Mnuchin spoke about the Trump administration’s tax plan at the Institute of International Finance. (Watch the video here.) Mnuchin described how the plan would pay for itself without adding to the national debt. He stated:
“The deal will pay for itself. Now, having said that, we fundamentally believe in dynamic scoring. So, as you know, static scoring – you change the tax code, you plug it in, you see what the cost is. So, you are correct, fundamentally you’re lowering taxes under a static score, it’s gonna cost money. Now, having said that, some of the lowering in rates is going to be offset by less deductions, in simpler taxes. So, some of it will be made up on that but the majority of it will be made up on in what we believe is fundamentally growth and dynamic scoring.
“And, you know, these are huge numbers. I mean you could have as high as $2 trillion difference in revenues over a 10-year period, depending on what you think is going to be the growth function. So the plan will pay for itself with growth.”
The United States Congress has already sentenced the next generation to a lower standard of living by virtue of its current $20.5 trillion in national debt. Just in the past fiscal year, the U.S. ran up a deficit of $666 billion. That follows deficits of $585 billion in 2016, $438 billion in 2015, $485 billion in 2014, $679 billion in 2013 and more than $1 trillion in deficits in each year from 2009 through 2012 despite extraordinary efforts to stimulate the economy following the 2008 Wall Street financial collapse.
The idea that cutting the taxes of corporations (which use their profits to buy back their own shares in order to artificially inflate share prices) and millionaires/billionaires (who own the vast majority of stocks that benefit from this share price inflation) will somehow trickle down to the real economy and the average Joe is simply another grand illusion from the Trump team.
Yesterday, the nonpartisan Joint Committee on Taxation released its analysis of just how much more debt the U.S. will be taking on if the Senate Tax Plan passes. The study found that economic growth would trim only $458 billion of the tax plan’s cost over the next decade while adding an additional $1 trillion to the national debt.
Senator Elizabeth Warren, who has spent enough time monitoring the devious deceptions of Wall Street to know a con job when she sees one, sent a letter yesterday to Eric Thorson, the Inspector General of the U.S. Treasury Department, demanding an investigation into why the Treasury Department did not release to the public its own official analysis of whether the tax plan would pay for itself. Warren wrote:
“On April 20th, Treasury Secretary Steven Mnuchin claimed that the Republican tax plan ‘will pay for itself with growth.’ In late September, Secretary Mnuchin went further, claiming that ‘not only will this tax plan pay for itself, but it will pay down debt.’ Such claims have been widely disproven by independent budgetary and economic experts. In fact, President Bush’s former Treasury Secretary, Paul O’Neill, was ‘dumbfounded by the notion that the tax cuts … would not add to the debt,’ and stated that ‘the whole thing seems astounding to me … the idea that after the most recently completed fiscal year where we had a $660 billion deficit we’re talking about a big tax cut.’
“Despite a lack of evidence to support his assertions, Secretary Mnuchin has claimed that over 100 people are ‘working around the clock on running scenarios for us’ to show that these corporate tax cuts will pay for themselves. Secretary Mnuchin ‘has promised that Treasury will release its analysis[.]’ Yet as Senate Republicans prepare to vote within the next day on the tax plan, the Department of Treasury has failed to produce any economic analysis supporting Secretary Mnuchin’s claims that the cuts will pay for themselves — in fact, they haven’t released any formal analysis of the bill’s economic impact at all.”
The New York Times reported yesterday that the Treasury’s Inspector General has confirmed that it has opened an inquiry into the matter.
Mnuchin is rapidly evolving as one of the most scandalous Treasury Secretaries in history. His Senate confirmation hearing was tarred with the tawdry details of his past business dealings and failure to disclose tens of millions of dollars in problematic assets. Since then, his wife, actress Louise Linton, has continued to set the Internet ablaze with her tone-deaf musings on the rich versus the little people and by inserting herself into the official functions of the U.S. Treasury Secretary.
At Mnuchin’s January 19 confirmation hearing, Senator Ron Wyden outlined his dubious past as follows:
“Mr. Mnuchin’s career began in trading the financial products that brought on the housing crash and the Great Recession. After nearly two decades at Goldman Sachs, he left in 2002 and joined a hedge fund. In 2004, he spun off a hedge fund of his own, Dune Capital. It was only a few lackluster years before Dune began to wind down its investments in 2008.
“In early 2009, Mr. Mnuchin led a group of investors that purchased a bank called IndyMac, renaming it OneWest. OneWest was truly unique. While Mr. Mnuchin was CEO, the bank proved it could put more vulnerable people on the street faster than just about anybody else around.
“While he was CEO, a OneWest vice president admitted in a court proceeding to ‘robo-signing’ upward of 750 foreclosure documents a week. She spent less than 30 seconds on each, and in fact, she had shortened her signature to speed the process along. Investigations found that the bank frequently mishandled documents and skipped over reviewing them. All it took to plunge families into the nightmare of potentially losing their homes was 30 seconds of sloppy paperwork and a few haphazard signatures.
“These kinds of tactics were in use between 2009 and 2014, a period during which the bank foreclosed on more than 35,000 homes. ‘Widow foreclosures’ on reverse mortgages – OneWest did more of those than anybody else. The bank defends its record on loan modifications, but it was found guilty of an illegal practice known as ‘dual tracking.’ One bank department tells homeowners to stop making payments so they can pursue modification, while another department presses on and hurtles them into foreclosure anyway.”
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