John Bresnahan and Burgess Everett report Deficit Don? Red ink gushes in Trump era (‘The president endorsed a bipartisan budget deal without any of the spending restraints previously demanded by Republicans’):
With a new bipartisan budget deal that does nothing to cut federal spending, Trump is on track for another $1 trillion deficit this year. And there’s no reason to believe the following fiscal year will be any different, with ballooning deficits from higher spending, the 2017 tax cuts — Trump’s signature legislative achievement, which slashed revenue — and none of the entitlement reforms long preached by Republican leaders on Capitol Hill.
Candidate Trump bragged that he would pay off the entire federal debt in eight years, but President Trump is governing as if deficits don’t matter.
In fact, Trump is approaching the level of red ink from President Barack Obama’s first term, when Obama racked up trillion-dollar deficits four years in a row. Trump is on pace to do the same, starting with this year’s yawning deficit of more than $1 trillion, according to budget estimates.
But there are huge differences: Trump has a growing economy with historically low unemployment and a soaring stock market, while Obama was battling a brutal downturn in the economy during the worst recession in 80 years, making it much harder to curb federal spending.
Austerity has an unfairly bad name, and Bresnahan and Everett imply a common claim about the tolerability of spending during recessionary times. Yet there are times when austerity is prudent. See Use—and Abuses—of Austerity, reviewing the fine Austerity: When It Works and When It Doesn’t (available on Kindle and well-recommended).
Trump lacks a recessionary foundation in defense of ever-greater spending. Instead, he endorses spending in huge amounts, favoring chosen investors (men who catch his attention), often unconnected to areas of suffering (such as the Midwest), and propping up otherwise dead-end industries (e.g., coal).
Ironically, Tump’s trade war footing and anti-market tariffs push the economy in a wrong direction that encourages others to seek even more spending to shield against the effects of his trade war footing and anti-market tariffs.
Spending under Trump winds up benefitting those without need (wealthy donors and no-future-anyway companies) with a small part going to compensate for the damage of his own pre-modern economic policies.
Trump’s market interference may drive America to a recession, by which time his trillions in spending will leave less room for those who would otherwise seek – by their estimation – a pro-spending program to lessen that future recession’s effects.
Trump often talks about what’s huge, but his own role as a huge wastrel will only leave America smaller.