Day 908: Trump’s national debt lie exposed again: 2019 will see $1T deficit

While campaigning, Donald Trump promised he had a grand plan to eliminate the $20 trillion or so in national debt within eight years, which was always absurd considering both economics and common sense.

He promised to grow the economy 6 percent annually to increase tax revenues. But once in office, he lowered his growth estimate to 3.5 percent to 4 percent.

These projections are above the 2–3 percent healthy growth rate. When growth is more than that, it creates inflation. Too much money chases too few good business projects. Irrational exuberance grips investors. They create a boom-bust cycle that ends in a recession. Trump’s Fiscal Year 2020 budget lowered annual growth rates down to between 2.4 percent and 2.9 percent annually.

Any president must cut into the biggest programs to make an impact on the debt. More than two-thirds of government spending goes to mandatory obligations made by previous Acts of Congress. For FY 2020, Social Security benefits cost $1 trillion a year, Medicare costs $679 billion, and Medicaid costs $418 billion. The interest on the debt is $479 billion.

To lower the debt, military spending must also be cut. The most Obama spent was $855 billion in FY 2011. The most Bush spent was $666 billion in FY 2008. Instead of cutting, Trump is breaking all those records. Military spending rose to $989 billion in FY 2020.

Add in significant tax cuts for corporations and the wealthiest Americans, and it’s a fool’s errand to even think about the national deficit falling.

Instead, despite an economy that continues to grow, the deficit is rising significantly too, according to the White House. In fact, the deficit is projected to jump $1 trillion in 2019 alone. (Apparently missing the irony, the cover page brags: “Promises Kept.”)

There’s a dire warning included about the trajectory of the deficit over the next decade too.

These relatively small updates to the budget picture do not change the overall trajectory of Federal spending and deficits. Without reform, trillion dollar deficits will continue throughout the budget window, and will drive debt to more than $33 trillion by 2029.

Trump made a ridiculous promise that he could never keep, in large part because he doesn’t understand basic economic principles. So Trump has continued to keep borrowing trillions of dollars — including from China — to pay for things, like increased military spending.

It’s amazing how quickly things flipped in Trump’s mind.

After 2013, deficits under Obama stayed under $700 billion every year. They’ve risen every year under Trump, and are projected to continue on the same trajectory.

908 days in, 554 to go

Follow us on Twitter at @TrumpTimer