Friday, August 3, 2018

Trump's Economy? Skyrocketing Budget Deficit and GOP "Free-lunchism."

NPR's report on Trump's growing budget deficit couldn't be clearer, and still my Trumpian friend in Milwaukee will say I'm just mad about losing the election:

Corporate tax receipts are down for the year, while government spending is up. Even with a fast-growing economy, the Treasury Department expects to borrow more than $750 billion to pay its bills during the last six months of this year. "The federal budget deficit is ballooning, skyrocketing, soaring, whichever way you want to describe it," said longtime fiscal watchdog Stan Collender, who blogs about federal finances as "The Budget Guy."

Even the White House's own rosy forecast acknowledges that the deficit will exceed 5 percent of the overall economy next year — a level it's previously reached only after deep recessions, when unemployment topped 10 percent. Today, the economy is near full employment. But the government is still acting like a spendthrift family, piling up credit card bills even though times are good.

"Let me be 100 percent clear about one thing: The tax cuts are never going to pay for themselves," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "They can grow the economy, but not enough to come anywhere close to offsetting the cost of them." MacGuineas blamed an outbreak of fiscal "free-lunchism" for the growing mountain of government debt.

The growing deficit also means higher borrowing costs. So far this fiscal year, growth in Social Security, Medicare and defense spending have all been eclipsed by rising interest on the debt.