While Nation Is Distracted With Michael Cohen, Paul Manafort, Omerosa & Russia, National Debt Under Trump Skyrocketing To Record Highs
The Trump administration has never been short of headlines no matter where one sits in support of or in opposition to this unconventional president. With so many moving parts enough to make anyone’s head spin, it is challenging for the news cycle to keep up, let alone the average voter. With the former Trump campaign officers and Trump confidantes Paul Manafort, Michael Cohen, Omarosa Manigault; and the Russian investigation sucking up so much news time, real issues such as fiscal stability are almost never brought up by news anchors and pundits. Our ballooning national debt under Trump who represents the Republican party of supposed fiscal discipline is not even remotely on anyone’s radar.
Under President Obama, Republicans rallied by the House Freedom Caucus debt hawks were constantly on the air vociferously denouncing the rising national debt and calling for austerity measures to reign it in. This commitment to reducing the federal deficit to see a path forward to one day making a dent in the national debt (or at the very least slow its expansion) reached a fever pitch among the congressional GOP to the extent that the government shut down once and was almost shut down several other times over budgetary show downs with President Obama. While one can certainly make case for the importance of fiscal discipline in government, concern about the debt among Republicans was non-existent when they had complete power under President George W Bush, as they passed a $3 trillion tax cut package while prosecuting 2 wars, subsequently doubling the national debt during President Bush’s 8 year presidency.
We now find ourselves nearly 2 years into President Trump’s presidency with Republicans having control of all branches of government and not one uttered note of concern about the national debt. To the contrary, despite the non-partisan Congressional Budget Office (CBO) reporting that the Republican tax cut bill would add $1.7 trillion to the national debt over 10 years, congressional Republicans pushed it through anyway dismissing the relevance of the CBO using the hopeful logic that economic growth spurred by the tax cuts would overcome deficits. The old adage that “hope is not a strategy” really holds true in this case, as the CBO warnings of pending severe increases in national debt as a result of the bill were actually too conservative and it appears that rising debt is poised to be significantly worse.
According to updated CBO estimates, within 16 years, the federal debt is projected to be the largest in history, even outpacing even the budgetary shortfalls that followed World War II. The recent GOP led tax and spending laws combined with ballooning costs of Social Security and Medicare, also are driving up the amount the government must pay in interest on money borrowed to make up for the gap caused by expenditures far outpacing revenues.
The CBO now predicts that those interest payments alone will exceed the cost of all Social Security spending within decades. Interest costs alone also will exceed discretionary spending which amounts to the full sum of all federal dollars Congress controls. By the end of this year alone, the debt will reach 78% of our gross domestic product. At this current rate, the debt will exceed the size of the economy within a decade, breaking the historic record of 106 percent by 2034.
The consequences are clearly laid out by the CBO in their report:
“Large and growing federal debt over the coming decades would hurt the economy and constrain future budget policy. The amount of debt that is projected under the extended baseline would reduce national saving and income in the long term; increase the government’s interest costs, putting more pressure on the rest of the budget; limit lawmakers’ ability to respond to unforeseen events; and increase the likelihood of a fiscal crisis.”
This trickle down broken record under GOP leadership has played itself out before.
- President Ronald Reagan tax cuts in the Tax Reform Act of 1986 resulted in a net tripling of the national debt from $900 billion to $2.7 trillion and a recession that cost his popular successor President George H.W. Bush re-election.
- President George W Bush tax cuts in the Economic Growth and Tax Relief Reconciliation Act of 2001 resulted in a near doubling of the national debt and the the worst fiscal and banking crisis in the United States since the Great Depression ending in the Great Recession
- President Donald J Trump Tax cuts and Jobs Act of 2017 has resulted in a $1 trillion increase in the national debt topping $21 trillion as of March 2018. According to one Washington times financial analyst, the annual increases on the national debt before the Trump tax cuts expire in 2026 could reach $3 trillion
For Presidents Reagan and Bush, their tax and spend policy consequences are already written and the results were not good. For our third go around with trickle down economics the end remains uncertain, but the sharp resultant rise in debt and growth not outpacing it as Republicans had confidently held out hope for is not not painting a pretty end game for the current tax policy. With history showing us that with each incarnation of trickle down economics the consequences are increasingly severe, Americans should have serious concerns about the exponentially growing debt and how that will impact the future.
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