Trump trillion-dollar-plus deficits are putting America on a path to fiscal ruin

[GMDino]

Note: Opinion piece.  The numbers are in the article. 

https://www.usatoday.com/story/opinion/2018/08/20/donald-trump-trillion-dollar-plus-deficits-fiscal-ruin-column/986236002/

Quote:It became very clear this month that neither the Trump White House nor its allies on Capitol Hill want you to know that the federal budget is already in very bad shape ... and getting worse.



It happened when the U.S. Treasury, the official keeper of Washington’s financial results, issued its monthly statement for the first 10 months of fiscal 2018 about federal revenues and spending and, therefore, the budget deficit.


Treasury showed what no president ever wants to admit: the deficit is spiking. The federal government’s red ink this year is already 21 percent above what it was in 2017 and there are few prospects that the bottom line will improve anytime soon.


Except with infrequent and unsubstantiated platitudes about how the situation is going to get better, the Trump White House and Republicans in 
Congress have been doing everything possible not to talk about the budget this year. To avoid tough questions and politically embarrassing votes, the House and Senate have even refused to consider a budget even though they are required by law to adopt one.


But this year isn’t the real issue.


Trump's deficits are permanent
Unlike the trillion-dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits that will soon reach and exceed $1 trillion are permanent and will only get worse in the years ahead.


The Trump deficits are the result of changes in federal spending and revenues that will continue to be in place until some president and Congress decide to reverse them, that is, to increase taxes and make cuts to popular programs.


Not only has there been little appetite to do that, many in Congress and the Trump administration seem to be hell bent on ignoring the current deficit and national debt and increasing spending and reducing revenues even further.

For example, the White House last week proposed a new Space Force that would likely add billions, if not hundreds of billions, to the Pentagon’s budget. Trump has asked for $25 billion for the wall he wants to build between the U.S. and Mexico. His much talked about but still unseen infrastructure plan would cost countless billions more.


More: Earmarks explosion: Republicans could set record with big spending on pork barrel projects
Social Security & Medicare are slowly dying, but no one in Washington will lift a finger
Washington's swamp gets swampier with new farm bill: Where does food stamp money go?


When the House returns to Washington in September, it is set to consider another tax cut that could reduce revenues by another trillion dollars. None of this includes the natural and man-made disasters — everything from earthquakes, forest fires and hurricanes to military, terrorist and foreign policy situations — that occur each year and cost more than planned.


Nor does it include interest on the national debt. The combination of big increases in federal borrowing from the very large deficits and the need for Washington to roll over its sizeable short-term debt at higher interest rates will make this the fastest growing spending of all.


And all of this is happening when the economy is doing well. The relatively mild economic downturn that many are now saying will occur over the next few years will lower revenues and increase the deficit even further.


That makes the Trump administration’s extreme reluctance to comment on last week’s deficit report from its own Treasury understandable: The news, which is already bad on its watch as a result of its policies, is only going to get worse.


Our national finances will only get worse
The White House was actually refusing to comment on three key issues.


First, it obviously doesn’t want to talk about how big the annual deficit could get in the years ahead. The Congressional Budget Office is already projecting it will exceed $1.5 trillion by 2028, and that assumes no changes from existing taxes and spending laws and no recession.


Second, it also doesn’t want to talk about how it will pay for more tax cuts, a Space Force, the wall, infrastructure or anything else ... including reducing the deficit.


Third, the Trump administration doesn’t want to explain how it’s going to manage the U.S. economy out of a recession if one happens on its watch. The traditional federal response of tax cuts and spending increases might not be as politically palatable as it has been in the past given that it could drive the annual deficit to close to $2 trillion.


The budget policymakers on Capitol Hill and in the Trump White House obviously aren’t focusing on much beyond 2018 and 2020. But they should at least be willing to admit that there’s a problem that will continue long after the votes have been counted in those elections.

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Stan Collender teaches federal budgeting at the McCourt School of Public Policy at Georgetown University and is the founder of thebudgetguy.blog. Follow him on Twitter: @thebudgetguy

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Are we tired of winning yet?

[fredtoast]

But, but, but, Democrats are the ones who "buy votes" by handing out goodies like tax cuts.

But we only account for 40% of the military spending of the entire world. So we have to increase that dramatically.

[Belsnickel]

I don't disagree, but let's not just blame Trump for this. There are a lot of things unique to Trump that make him reprehensible, but his debt ballooning tax cuts and spending aren't one of them. We should be discussing this in terms of an ongoing problem with the politicians in Washington. I know that USA Today chose the title, and that's part of the problem with the framing of these discussions. This is a bi-partisan, establishment issue and trying to tie it to a politician just makes it more divisive than it should be.

[GMDino]

(08-20-2018, 01:28 PM)Belsnickel Wrote: I don't disagree, but let's not just blame Trump for this. There are a lot of things unique to Trump that make him reprehensible, but his debt ballooning tax cuts and spending aren't one of them. We should be discussing this in terms of an ongoing problem with the politicians in Washington. I know that USA Today chose the title, and that's part of the problem with the framing of these discussions. This is a bi-partisan, establishment issue and trying to tie it to a politician just makes it more divisive than it should be.

I agree with it being an ongoing problem. But I would like to also point out that the Trump supporters/defenders still think he's going to shrink the deficit and run America like one of his businesses.  Those two things are mutually exclusive.

As the current POTUS, one that claims to be the best with money, it's worth noting that the "best" businessman is continuing the trend despite "not being a politician".

And, again, I noted it is an opinion piece.  The numbers don't lie though.

[Nebuchadnezzar]

I remember my Sociology teacher at West Hi complaing about how the US debt could reach $1 Trillion and how we would never be able to pay that much money back.

Now we are staring at $22 Trillion in debt? And no doubt, we can't pay it back.

We do need some debt, maybe a quarter or half of what it is now. I read a long time ago that our debt actually helps those that buy it and it's paid back or something like that.

But $22 Trillion is just outrageous and it's not ever going to get better the way our government spends.

[Millhouse]

Below are the yearly deficits going back to 1969. The link has the list going back to 1929.

Now though the author tried to deflect the immediate deficit that occurred under Obama was due to the recession which I wont argue. But the deficit in 2015 and 2016 was higher than any point under Bush during those post 9-11 years, and it rose from 2015 to 2016. That said Republicans controlled Congress so they share the blame too.

On to Trump. He is going to make Reagan look like Clinton, because as you can see the deficits rose sharply during the Reagan years. But his deficits are on pace to be a 1/4th of what Trump's will be, and we arent even in a cold war, inflation or not.

https://www.thebalance.com/us-deficit-by-year-3306306

Year Deficit Debt Increase Deficit/GDP Events Affecting Deficit
1969 ($3) $6 (0.3%) Nixon took office.
1970 $3 $17  0.3% Recession.
1971 $23 $27  2.0% Wage price controls.
1972 $23 $29  1.8% Stagflation.
1973 $15 $31  1.0% End of gold standard.
1974 $6 $17  0.4% Budget process created.
1975 $53 $58  3.1% First Ford budget.
1976 $74 $87  3.9% Stagflation.
1977 $54 $78  2.5% Stagflation.
1978 $59 $73  2.5% First Carter budget.
1979 $41 $55  1.5% Volcker raised rates to 20%.
1980 $74 $81  2.6% Recession. Iran oil embargo.
1981 $79 $90  2.4% Reagan tax cut.
1982 $128 $144  3.8% Reagan's 1st budget.
1983 $208 $235  5.6% Jobless rate 10.8%.
1984 $185 $195  4.5% Increased defense spending.
1985 $212 $256  4.8%
1986 $221 $297  4.8% Tax cut.
1987 $150 $225  3.1% Market crash
1988 $155 $252  2.9% Fed raised rates.
1989 $153 $255  2.7% S&L Crisis.
1990 $221 $376  3.7% Desert Storm.
1991 $269 $432  4.3% Recession.
1992 $290 $399  4.4%
1993 $255 $347  3.7% Clinton signed Balanced Budget Act.
1994 $203 $281  2.8% First Clinton budget.
1995 $164 $281  2.1%
1996 $107 $251  1.3% Welfare reform.
1997 $22 $188  0.3%
1998 ($69) $113 (0.8%) LTCM crisis.
1999 ($126)$130 (1.3%) Glass-Steagall repealed.
2000 ($236)$18 (2.3%) Surplus.
2001 ($128)$133 (1.2%) 9/11 attacks. EGTRRA.
2002 $158 $421  1.4% War on Terror.  
2003 $378 $555  3.3% JGTRRA.
2004 $413 $596  3.4%
2005 $318 $554  2.4% Katrina. Bankruptcy Act.
2006 $248 $574  1.8% Bernanke chairs Fed.
2007 $161 $501  1.1% Iraq War cost.
2008 $459 $1,017  3.1% Bank bailout. QE.
2009 $1,413$1,632  9.8% Stimulus Act.
2010 $1,294$1,905  8.6% Obama tax cuts. ACA. Simpson-Bowles.
2011 $1,300$1,229  8.3% Debt crisis.
2012 $1,087$1,276  6.7% Fiscal cliff.
2013 $679 $672  4.0% Sequester. Government shutdown.
2014 $485 $1,086  2.7% Debt ceiling.
2015 $438 $327  2.4% Defense = $736.4 b.
2016 $585 $1,423  3.1% Defense = $767.3 b.
2017 $665 $672  3.4% Defense = $812.3 b.
2018 (est) $833 NA  NA Defense = $824.7 b.
2019 (est) $984 NA  NA
2020 (est) $987 NA  NA
2021 (est) $916 NA  NA

[Dill]

(08-20-2018, 03:46 PM)Nebuchadnezzar Wrote: I remember my Sociology teacher at West Hi complaing about how the US debt could reach $1 Trillion and how we would never be able to pay that much money back.

Now we are staring at $22 Trillion in debt? And no doubt, we can't pay it back.

We do need some debt, maybe a quarter or half of what it is now. I read a long time ago that our debt actually helps those that buy it and it's paid back or something like that.

But $22 Trillion is just outrageous and it's not ever going to get better the way our government spends.

Just as critical is how our government cuts taxes. That, plus increased military spending, is what started us down the road of huge peacetime deficits back in 1980-88.

[Dill]

(08-20-2018, 02:04 PM)GMDino Wrote: I agree with it being an ongoing problem. But I would like to also point out that the Trump supporters/defenders still think he's going to shrink the deficit and run America like one of his businesses.  Those two things are mutually exclusive.

If he is running America like one of his businesses, then I don't think we should worry. Russia will bail us out if we bankrupt.

[Belsnickel]

(08-20-2018, 03:46 PM)Nebuchadnezzar Wrote: I remember my Sociology teacher at West Hi complaing about how the US debt could reach $1 Trillion and how we would never be able to pay that much money back.

Now we are staring at $22 Trillion in debt? And no doubt, we can't pay it back.

We do need some debt, maybe a quarter or half of what it is now. I read a long time ago that our debt actually helps those that buy it and it's paid back or something like that.

But $22 Trillion is just outrageous and it's not ever going to get better the way our government spends.

Most of the debt is held by US citizens in the form of bonds. A good chunk is held by the SSA on behalf of the citizens. Also, deficits mean that the government is putting money into the economy rather than taking it out. All of that being said, we our politicians tend to think fo deficit spending like a hammer and they see everything as a nail, even if it isn't. That's the biggest problem we are facing.

[NATI BENGALS]

You know what they say. Go to your private resort on the tax payers dime and golf about it.

Ive thought all along a 70 year old man with a life long history of bankruptcies and failed businesses was due for a turn around.

I also thought for sure unpaid for tax cuts would work this time. Then the tariffs on China so we could bail out our own farmers seemed like a genius move.

Im ready to dump a bunch of money into this wall and military parade. We all know truth isnt the truth. So lets just go with it is really a surplus. Once the space force gets rolling who knows what kind of space pirate treasure we find.

You thought you had to be a total shithead moron to bankrupt a casino? How about morally and fiscally bankrupting the greatest country on Earth?

[Yojimbo]

Citing budget deficits, Trump is canceling a 2.1 percent raise for civilian federal employees. The tax cuts just keep on making working Americans’ lives better.

https://www.truthdig.com/articles/trump-cancels-pay-raise-for-civilian-federal-employees/

[Benton]

(08-30-2018, 08:26 PM)Yojimbo Wrote: Citing budget deficits, Trump is canceling a 2.1 percent raise for civilian federal employees. The tax cuts just keep on making working Americans’ lives better.

https://www.truthdig.com/articles/trump-cancels-pay-raise-for-civilian-federal-employees/

They should put in to transfer to Space Force.

[fredtoast]

(08-30-2018, 08:26 PM)Yojimbo Wrote: Citing budget deficits, Trump is canceling a 2.1 percent raise for civilian federal employees. The tax cuts just keep on making working Americans’ lives better.

https://www.truthdig.com/articles/trump-cancels-pay-raise-for-civilian-federal-employees/

"Greatest US economy ever thanks to me.  HUGE economy.  The economy is AMAZING under me. Tax cuts mean higher wages for EVERYONE .  .  .  .But becuase of the financial condition of the UNited States the working people employed by the federal government can not have  a raise."






And no Trump supporters will see any problem with that logic.

[ballsofsteel]

I'd be willing to give back that extra $10 in my paycheck if it would help the deficit. Let me know.