The 2017 tax bill may be the worst and most dangerous piece of legislation since the 1930 Smoot Hawley protectionist legislation that shrank international trade in the following three years by almost half and led directly in the 1930s to the horrors of the worst depression this country has ever experienced.
Among the similarities was the fact that 1000s of the leading economist –of all political stripes—then and now –have written and warned the country at large of the likely adverse consequences.
The only materiel distinction is that Smoot Hawley immediately led to retaliatory trade restrictions and this tax bill will lead to a rapid rush to inflation everywhere in the world which will radiate into depressed economies worldwide through shrinking investment.
There is one other distinction which is crucial, and if we move aggressively in the right ways, just might dampen the adverse effects of this new tax bill.
The trade protectionist legislation in 1930 took effect IMMEDIATELY and was responded to immediately.
Significant parts of the new tax bill take effect over several years.
Thus IF the other world economies see wise and serious counter measures being planned by the Democratic leadership for post the 2018 midterm elections, the radiating consequences might be successfully restrained, if the world reads the political tea leaves as do most Americans today.
THEREFORE, a vital and immediate task for the current Congressional leadership will be to convene a task force from both the Senate and the House to map out the outlines of an appropriate tax reform plan to immediately replace today’s treacherous bill.
If the US and global market places see what is likely to happen in early 2019, hopefully they will adapt better to what is otherwise in store for us today.
Yes, either Trump or Pence just might still be President. But, remember that there were quite a few Republican House and Senate members who went along with the flawed tax bill under duress. Hopefully, the political climate then may be sufficiently different for the then Democratic leadership to lure enough Republicans to create a veto proof majority to get the country back on track.
SURE! This is a long shot. BUT it cannot hurt anything to show the country and the world what a Democratic tax reform plan would look like? AND SOON!!!