Last year's aggressive tax cuts are at the heart of a worsening budget situation that will see deficits surge in the years ahead, according to an op-ed by former Fed Chair Janet Yellen and others.
The essay, published in Sunday's Washington Post, rebuts a study from Stanford University's Hoover Institution that blamed entitlement spending for the nation's worsening financial picture.
However, Yellen and a team of other economists reject the notion that Social Security, Medicare, Medicaid and veterans' benefits are the prime culprit. Instead, they insist, the main problem is that Congress passed a tax cut bill at precisely the wrong time.
"As we focus on the long-run fiscal situation, our goal should be to put the debt on a declining path as a share of the economy. That will require running smaller deficits in strong economic periods — such as the present — to offset the larger deficits that are needed in recessions to restore demand and avoid deeper crises," the group wrote. "Last year's Tax Cuts and Jobs Act turned that economic logic on its head."