EconoMeter ponders whether a higher deficit is OK with a tax cut?

Sen. Bob Corker, R-Tenn.,says he remains deeply concerned about enacting tax cuts that add to the deficit but suggested Republicans may not rely on traditional economic scoring models when assessing the fiscal impact of proposed $1.5 trillion tax cut. (AL DRAGO / New York Times)                                                                

Question: Will it be acceptable to propose tax changes that increase the federal deficit?

Bobs Answer: YES

Tax reform must be enacted to increase capital formation; any budget deficit increase will only be temporary. We need to generate the kind of economic growth necessary to provide the federal treasury with enough revenue to pay down our debt. The net tax changes may increase the budget deficit in the short term but will increase growth and incomes in the long term. Gross domestic product growth of 3 to 4 percent per annum is achievable.

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