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Two Harvard economists say tax law won't pay for itself

Donald Trump preparing to sign new tax law and a job bill
Donald Trump speaking on the newly signed tax law. Photo: Chip Somodevilla/Getty Images

Harvard economists Robert Barro and Jason Furman say an increase in productivity stemming from President Trump's new tax law will not be enough to offset revenue losses from those same tax cuts, the Wall Street Journal reports.

“This is yet more evidence that the law would not come close to paying for itself."
— Jason Furman in an interview with WSJ.

Why it matters: In December, the Treasury Department admitted that the tax plan may not be revenue neutral, despite Treasury Secretary Steve Mnuchin and other administration officials having said it would be. Barro and Furman's findings is further evidence pointing in that direction.

By the numbers :

  • Their research determined that the United States' GDP would increase by 0.4% by the end of the decade.
  • Yes, but: They also determined that the net cost to the Treasury could reach $1.2 trillion in that same time span.
Lauren Meier 1 hour ago
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Facebook's growing problems

Illustration: Rebecca Zisser/Axios 

Facebook is caught in the middle of a rapidly unfolding scandal over Cambridge Analytica's improper gathering of data on millions of users, and what that exposed about the company's data collection. The fiasco has drawn the interest of lawmakers and regulators and rekindled the debate over its role in the 2016 presidential election.

Why it matters: The bad headlines continued to pile up; "A hurricane flattens Facebook" said Wired, "Silicon Valley insiders think that Facebook will never be the same" per Vanity Fair, "Facebook is facing its biggest test ever — and its lack of leadership could sink the company" from CNBC, and — as we've yet to hear from the company's top leaders — "Where is Mark Zuckerberg?" asks Recode.

Dave Lawler 7 hours ago
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What Trump and Putin did and didn't discuss

President Trump spoke with Vladimir Putin this afternoon, and congratulated him on winning re-election on Sunday. After the call, Press Secretary Sarah Sanders was asked whether Trump felt the election had been free and fair, and said it wasn’t up to the U.S. to “dictate" how Russia holds elections.

The bottom line: Trump is not alone in congratulating Putin — leaders in France, Germany and elsewhere have done so this week, as Barack Obama did in 2012. But past administrations certainly have seen it as America’s role to call balls and strikes when it comes to elections abroad, and weigh in when democratic institutions are being undermined. A departure from that approach would be welcomed not only by Putin, but other leaders of pseudo democracies around the world.