US’s Reagan-era economic promises return as Trump’s AI-fueled growth fantasy
Source: The Guardian ·
‘Even if AI supercharged the economy, its impact on the government’s finances would be muted’Back through political history to the age of Ronald Reagan, Republicans have repeatedly promised the US public that tax cuts would pay for themselves, firing up economic growth and filling the government’s coffers.The promise never really panned out. From the Gipper’s day on, the Republicans’ tax cuts…
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Back through political history to the age of Ronald Reagan, Republicans have repeatedly promised the US public that tax cuts would pay for themselves, firing up economic growth and filling the government’s coffers. The promise never really panned out. From the Gipper’s day on, the Republicans’ tax cuts inevitably increased the budget deficit. Despite its failure, though, the promise is back, coated in a fine new layer of artificial intelligence pixie dust. It will fail again. The treasury secretary, Scott Bessent, is relying on an AI-laced economy when he promises to deliver annual economic growth of 3% – a rate that, except for the rebound from the Covid pandemic, has been achieved only twice this century. Dreams of AI inflect Donald Trump’s fantasy that “we’re growing at a faster rate than we’ve ever grown before,” which will allow the government to “take care of the 40 trillion” in federal debt “over a period of time”. Financial markets, however, are not buying. Last week, the…