People who elected so-called “fiscally conservative” Republicans, including Donald Trump, have a right to expect that one goal will be to reduce the national debt, which is seen as a huge burden being dumped on future generations and was a central platform of Trump’s presidential campaign.
Trump even promised during the campaign that he would get rid of the entire national debt “over a period of eight years.”
A report just issued by the Congressional Budget Office (CBO), however, predicts just the opposite is ahead – and it is terrible news.
It projects the national debt will at least double in the next 30 years, and that could go even higher if interest rates rise, which is a very real possibility.
“The prospect of such large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges,” according to the report from the non-partisan government agency.
Instead of addressing the debt crisis, Trump has announced programs that will make it much worse. Those include his plans to vastly increase defense spending, beyond what can be offset by drastic cuts in social programs; his plans to spend heavily to repair the crumbling national infrastructure; and his pricey border wall.
The biggest driver of a higher debt would be Trump’s plan for tax reform. Based on the proposal he made during the campaign, Trump wants to cut personal income tax rates, lower the corporate tax rate from 35 to 15 percent, repeal the estate and alternative minimum taxes, and lower taxes on investment income.
CBS News reports Trump’s tax plan could reduce federal revenues over the next decade by between $4.4 trillion (according to a conservative group) and $6.2 trillion (according to a progressive think tank).
There is no secret about the source of the debt. When the U.S. spends more than its revenues, the debt increases. Last year, the deficit was $587 billion.
This year the CBO predicts the deficit will be about 2.9 percent of GDP, growing to 4 percent between 2018 and 2027, and 8.6 percent between 2038 and 2047.
The national debt is currently $14.3 trillion, which is about 77 percent of the Gross Domestic Product (GDP). They predict it will increase to 89 percent of GDP by 2017 and 113 percent by 2037, which would be the worst since World War II.
It currently takes about seven percent of all federal spending to cover the interest cost of the debt. By 2047, the CPO predicts interest costs will be 21 percent.
Social Security and health care programs currently eat up 54 percent of federal funds not spent on interest, compared to an average of 37 percent in the past 50 years. The CBO predicts that will rise to 67 percent by 2047.
“Large and growing federal debt over the coming decades would hurt the economy and constrain future budget policy,” the CBO analyst wrote. “The amount of debt that is projected under the extended baseline would reduce national saving and income in the long term, increase the government interest costs; put more pressure on the rest of the budget; limit lawmakers ability to respond to unforeseen events, and increase the likelihood of a fiscal crisis.”
The CBO report is a just prediction, and it doesn’t include Trump’s spending and tax cut plans, which would make the picture of the future much darker.
This is a time for sane, sober and careful moves to protect the nation from a dismal future as a debtor that isn’t in control of its own destiny and isn’t able to respond to events like global warming, wars, and unpredictable medical epidemics.
Trump is the wrong President, at the wrong time, with the wrong policies to respond to this dire warning while there is still time to act. The candidate who said he would cut the debt seems doomed to be remembered for letting it explode, even after a sober warning about the consequence of his out of control actions.
But then again, he is the same President who said the CBO could not be trusted when it made predictions about the real cost and consequences of Trumpcare.
So who do you trust?
The post Trump Vowed To Eliminate The Debt. The CBO Responds… appeared first on Occupy Democrats.