UPDATE: This was Trump's craziest promise yet
By Paul Brandus, MarketWatch
Pledge to eliminate national debt looks more and more remote
Even by his standards, President Trump's State of the Union two weeks ago was long winded. He spoke for nearly an hour and a half, and covered every topic under the sun. Every topic that is but one of the biggest and most important of all: the surging federal deficit and national debt.
It seems Trump has completely forgotten about one of the crazier campaign pledges he made in 2016, I think one of the craziest he's ever made, in fact: to eliminate the national debt. Not the deficit mind you, which is just how much red ink Uncle Sam spills each year--but the entire debt itself. All $20 trillion of it.
Read:The U.S. has over $20 trillion in debt -- here's how it got here (http://www.marketwatch.com/story/heres-how-the-us-got-to-20-trillion-in-debt-2017-03-30)
To quote Richard Nixon, let me be perfectly clear: When the Trump presidency is over, whenever that might be, not only will the debt be bigger, it will a lot bigger, and even worse, a lot bigger with higher interest rates. Enjoy your modest and short-lived tax cut folks, because all this debt and higher interest payments for it, all but guarantees that your taxes will go higher over the long run to pay for it. Give Trump credit for being honest: as a businessman he called himself the "king of debt" and that's the mentality he brought into the White House.
Trump's hardly the only guy in this screwed-up town who loves running up a tab and sticking you with the bill. Congress controls the purse strings, and in the eight years since Republicans won control of the House, the national debt has skyrocketed from $13.5 trillion at the beginning of fiscal year 2011 to $20.4 trillion today. Dick Cheney, who served as George W. Bush's vice-president, summed up the Republican mentality well: "Deficits," he declared in 2002, "don't matter." Perhaps they don't for five-heart attack Cheney and his ilk, who won't be stuck with this monstrous bill, but they do for the rest of us.
These numbers are getting worse and they're getting worse quickly. The budget deal signed Friday that keeps the government running (http://www.marketwatch.com/story/senate-passes-budget-deal-as-government-remains-shut-down-2018-02-09) (after yet another temporary shutdown) unleashes a gusher of spending: the nonpartisan Committee for a Responsible Federal Budget now forecasts that the federal deficit could hit $1.2 trillion next year.
At least Trump's honest about his love of debt. The same cannot be said of Paul Ryan. Once a young turk who came to town vowing to slash deficits, he just signed off on one of the biggest non-recessionary deficit hikes in American history. You think Trump's the "king of debt?" Ryan's hypocrisy is breathtaking.
But back to the central problem: What to do about all this debt? The fact is even if he cares, and I don't think he does, Trump hasn't a clue. He actually said back in 2016 that he could wipe out the debt simply by negotiating better trade deals. Here's an excerpt from a March 31, 2016 interview with Bob Woodward of the Washington Post:
Woodward: "Would you ever be open to tax increases as part of that, to solve the problem?"
Trump: "I don't think I'll need to. The power is trade. Our deals are so bad."
Woodward: "That would be $2 trillion a year."
Trump: "No, but I'm renegotiating all of our deals, Bob. The big trade deals that we're doing so badly on. With China, $505 billion this year in trade. We're losing with everybody."
It's impossible to overstate Trump's fiscal and economic ignorance here. The trade deficit with China when Trump spoke with Woodward was $366 billion, and the entire U.S. trade deficit with all countries, was $531 billion, according to Census Bureau data. That's a drop in the bucket compared to $20 trillion.
If I've said it once, I've said it a thousand times: The biggest source of deficits and debt is entitlement spending. Some 60% of federal spending is for Social Security, Medicare and Medicaid. If you think deficits and debt are a problem now, just wait. Some 10,000 baby boomers are leaving the workforce every day--this will continue until 2029 or so--and they're living longer, which means more entitlement spending. There aren't enough younger workers to support them--the ratio has even declining for decades--and the current anti-immigrant mood in the White House and in much of Congress is making it worse, by restricting the number of future taxpayers coming into the country.
Deficits and the debt are getting worse, and they're getting worse quickly. Trump has no grasp of the problem, and members of Congress who talk a good game are spineless and nowhere to be found when tough solutions are needed. God help us.
-Paul Brandus; 415-439-6400; AskNewswires@dowjones.com
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02-09-18 1505ETCopyright (c) 2018 Dow Jones & Company, Inc.