“In the recent (2020) GOP primary presidential debate, former United Nations Ambassador Nikki Haley claimed that President Trump added $8 trillion to the national debt while Florida Governor Ron DeSantis said that President Trump added $7.8 trillion to the debt. These statements are true, depending on how you measure additions to the debt. We estimate the ten-year cost of the legislation and executive actions President Trump signed into law was about $8.4 trillion, with interest.” January 2024, Committee for a Responsible Federal Debt.
Donald Trump and the Republicans’ most significant legacy will be the huge budget deficits they are projected to leave behind. It will mainly be due to present and upcoming tax cuts they promise to enact without any way to pay for them, except shrinking the social safety net.
And adding higher tariffs to the mix will raise the cost of everything and perhaps cause the Federal Reserve to pause outright in further rate cuts.
Takashito Ito, a former Japanese Deputy Prime Minister of Finance has predicted what will be the result.
“Beyond alienating friends and partners, Trump’s tariffs will probably fail to advance his apparent goal of reducing the U.S. trade deficit. If other countries adopt retaliatory tariffs, total exports from the U.S. — and global trade overall — may well decline. Moreover, high U.S. tariffs would fuel domestic inflation, forcing the U.S. Federal Reserve to raise interest rates, which would probably cause the U.S. dollar to appreciate, causing exports to fall and imports to rise.”
In fact, Nikki Haley was right in their 2020 primary debate: Of the $8.4 trillion President Trump added to the debt, $3.6 trillion came from COVID relief laws and executive orders, $2.5 trillion from tax cut laws, and $2.3 trillion from spending increases, with the remaining executive orders having costs and savings that largely offset each other, said the Committee for a Responsible Federal Debt.
Republicans inflated the budget deficit once before during the GW Bush presidency when they had the chance to almost eliminate it. President Clinton and VP Gore had engineered budget surpluses—yes surpluses—as high as +$236 billion, from 1996-2000 in their last four years that was mainly designed to strengthen social security and Medicare.
Bush’s first Treasury Secretary had also recommended it, but VP Cheney fired him after his first year in office for being such a spending scrooge. Bush had campaigned on returning some of the surplus to taxpayers via tax cuts, because 60 percent of the public in surveys favored tax cuts. But just 12 percent of the tax savings went to the middle class while the wealthiest garnered 79 percent of the tax cut benefits, according to PEW Research.
The Bush administration ended with the first $1 trillion federal budget deficit because of the $trillion spent on the invasion and occupation of Iraq and Afghanistan. Rising budget deficits have been the case ever since with Republican administrations.
It is why we will probably see even more federal debt in Trump’s next four years. It looks like a repeat performance as he is again nominating those most loyal and most incompetent for some of his cabinet picks, such as Pete Hegseth for Defense Secretary, Tulsi Gabbard for the Department of National Intelligence, and Robert Kennedy, Jr. for Health and Human Services.
He has again been using the same bullying tactics to attempt to get his cabinet picks through the Senate without background checks or security clearances. How easily Americans have forgotten that he has used such tactics his whole life to intimidate, once again highlighting his own incompetence to be POTUS.
Harlan Green © 2024
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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