Shall we thank Donald Trump for proving that deficit spending doesn’t hurt the economy?
Through August 2016, the FY2016 deficit was $619 billion. Through August 2017, the FY2017 deficit was $673 billion. the first full Trump budget has increased the deficit 32%:
The federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period the previous year, according to the Congressional Budget Office (CBO).
The nonpartisan CBO reported that the central drivers of the increasing deficit were the Republican tax law and the bipartisan agreement to increase spending. As a result, revenue only rose 1 percent, failing to keep up with a 7 percent surge in spending, it added [Niv Elis, “Federal Deficit Soars 32%,” The Hill, 2018.09.11].
Dusty Johnson thinks that electing more Republicans like him to Congress will help rein in that deficit. But we elected Republicans like him last time and got this 32% increase in the deficit. The empirical evidence shows that Republicans say they’ll lower the deficit then do the opposite, especially when Donald Trump promises $5,000 fundraising photo ops in return. That’s more evidence that we’re better off electing honest Democrats than dishonest Republicans.
The deficit is soaring because Republicans like Dusty and Kristi lack the will to resist more spending as surely as they lack the will to resist Donald Trump’s other excesses. The only people pulling their weight around here are individual taxpayers, whose increased tax payments this year outstripped the tax breaks corporations got from Trump and Noem:
Receipts totaled $2,985 billion during the first 11 months of fiscal year 2018, CBO estimates—$19 billion more than during the same period last year. The changes between last year and this year were as follows:
Individual income and payroll (social insurance) taxes together rose by $105 billion (or 4 percent).
…Corporate income tax receipts fell by $71 billion (or 30 percent), reflecting payments for the 2017 and 2018 tax years [Congressional Budget Office, “Monthly Budget Review for August 2018,” 2018.09.10].
Don’t let any Republicans tell you they care about the deficit. This Congress shows they don’t. Fiscally conservative voters have two tenable options: abandon deficit-hawkery as Trumpublicans have, or vote for Democrats.
I suppose the deficit (like other things — wink, wink, nudge, nudge, know what I mean?!) is not as much about the size, but how you use it. If spending is used in ways that spur the long-term development of an economy, it is an investment that will pay off later and therefore good; if it is spending that is not good for long-term growth, it is just debt that has to be paid later and therefore bad.
Spending on long-term infrastructure projects that lower the cost to trade and employ lots of people at good wages would be good for the economy. That was the Trillion-dollar undelivered promise of the Trump administration; a promise derailed in large part because of deficit concerns. On the other hand, spending on giving the tip of the most wealthy give-backs to boost their individual wealth, that do not increase employment or wages, will not turn out well for an economy; those sailed through congress.
For the GOP, “deficits” and “debt” is the boogieman/club brought out as the weapon in pursuit of class warfare — not a guiding economic principle of governance.
What matters to Republicans is shuffling welfare to the rich through tax “reform” while shredding the social safety net. The playbook has been pretty transparent over several generations. Just in my lifetime I’ve seen this playbook play out over several iterations.
Step 1. Demand higher growth through vodoo economics. Trickle-down theories never pan out. Tax cuts to the rich that supposedly end up with job growth and wage growth never work as predicted. More revenue in future years never makes up for the loss of revenue, and can’t be attributed to the failed theories in any case. This has proven time and time again.
Step 2. Policies of deregulation create bubbles of corruption with the inevitable economic collapse of parts of the economy. It’s no secret that the administrations who most fervently push deregulation (Reagan and Trump) are the most corrupt. A recession results with loss of jobs, and growth in federal expenditures in the safety net area.
Step 3. Republicans start complaining about federal deficits as a means to justify stripping the social safety net. They never complain about the tax benefits they handed out to their donors.
Step 4. When Democrats gain power, the caterwauling about deficits explodes, especially if Democrats enact economic stimulus in parts of the economy that benefits the lower and middle classes, and not the rich Republican donor class.
Step 5. Republicans begin to blame the deficit on any and every segment of society except their donors. Seniors get blamed and Republicans seek crippling changes to Social Security and Medicare. Of course, there has to be a racial component to their blame, so welfare queens and black men get their abuse on Rush and Fox News. Then, of course, there is the Mexican and immigrant angle they have to push to keep the haters in line.
Deficits start to matter to Republicans only when Democrats gain control of government. They eventually get around to trying to cut Medicare, Medicaid, TANF, nutrition assistance, etc., and any function of government that doesn’t benefit their wealthy donors.
It’s been playing out this way most of my adult life. It used to not be that way. Until Reagan, and cowboy economics, Republicans had a reasonable, if stuffy, approach to economics. That’s the economics I believe in. Small deficits and small debt are fine, but you gotta be careful. And we aren’t being careful. Municipal debt is pretty high, and so is the national debt. State structural deficits are going back up. We’re in for a reckoning.
That is the Grover Norquist “Starve the Beast” playbook.
You can’t trust Republicans with money. They really like to borrow and spend, and they have been doing so to try and buy votes. Problem is, the tax cuts went mostly to the wealthy who were going to vote GOP anyway. And the corporate cuts haven’t translated to higher wages, so most people aren’t buying the GOP party spin that the tax cuts were for the middle class. So what is the GOP congress doing? Why of course they’re working on another tax cut – meaning bigger deficits. Maybe the public will believe this next round of tax cuts is for them, not billionaires and corporations.
“It’s the economy stupid” worked for Bill Clinton. But he didn’t have to buy a good economy with deficit – expanding tax cuts. He actually paid down the national debt. Even Mitt Romney is complaining that nobody in the GOP party cares about deficits anymore.
Rors, I’ve been reading about that too. Pootiepublicans are trying to stuff through Congress one more big tax cut for the rich before they lose everything in the election.
Soulless bastards.
You guys are hitting on all cylinders on this thread! All those rich people are using the deficit to line their corporate pockets with the money of the working people. Every tax break only puts more money in the pockets of the people who pay taxes and that is so wrong! I think all of us democrats should band together and fight this establishment from paying all these taxes that rightfully belong to the people that pay them, the working stiffs , who we are defending by fighting for the government to keep more of their money that was so unfairly taken from the workers slaving for the corporate bastards who give them jobs to earn more money that we help the government to take away! Bastards!
When the Great Recession began and Congress and the Fed had to throw every tool they had at stemming the onset of what could have been another Great Depression, deficit spending helped to bring our economy out of a potential death spiral. The government had the flexibility to take extraordinary measures because our debt to GDP levels at the time were manageable.
Now, in a period of sustained economic growth, we should be paying down the debt, or at the very least, reducing the deficit. This is so that we can maintain the capability to combat periods of economic weakness with fiscal stimulus.
Instead, the Republicans have given the rich a windfall and driven our deficits to new heights during a period of economic expansion and stability. The recklessness that this displays with regard to our economic future is astounding. Our children and grandchildren may look back on this period as the time their future was mortgaged.
The near term effects of the reckless deficit spending by Republicans will eventually be higher interest rates which will exacerbate the problem of paying back all of the money our government is borrowing. If we keep heading down this road, interest on the federal debt will
soon crowd out other discretionary spending leaving us with even less flexibility. The long term effects could be the inability to combat the next serious economic downturn without permanently damaging the US Dollar and, thus, our standard of living.
Recall the demise of every great empire in history that overextended themselves, militarily, economically or otherwise. Most recently, as Republicans should remember, the demise of the Soviet Union was hastened by unsustainable deficit spending. The US is obviously in a much better economic position than the Soviet Union ever was, but the same economic forces eventually come into play no matter the size of our economy.
This is not going to end well.
Mr. Larson, you are correct. In fact, trump is already borrowing from Peter to pay Paul. FEMA is $10 million dollars lighter for this year. They had to give it to ICE for the detained children in concentraion camps to help cover costs. There are now more than 12,000 of these child prisoners so that means that FEMA and others got hit for about $40 million more for the camps.
“”As the predictions of Hurricane Florence’s impact on the east coast become more dire by the hour, FEMA’s budget is apparently $10 million lighter. The Trump administration reportedly transferred that amount from the Federal Emergency Management Agency to U.S. Immigration and Customs Enforcement (ICE) earlier this year.
Budget documents show the transfer of $9,755,303 from FEMA to ICE. That represents just under 1% of the agency’s overall budget. Money was also transferred to ICE from the U.S. Coast Guard and the Transportation Security Administration.
The money, according to the document, was used to increase detentions on the southern border, remove undocumented immigrants and pay for beds in detention centers.” http://fortune.com/2018/09/12/fema-ice-hurricane-florence-trump/
I don’t even think we will have enough money to buy paper towels for our carnival barker to toss to the survivors. The rich guys can fly away from it all for the time being, but that too will become more difficult. We can only print so much paper before it becomes like the German Mark just 100 years ago, fire starter.
jerry, I would be the last one to argue with you about FEMA spending except someone must have fed you bad information concerning the money that went from FEMA to ICE. It is clear that someone decided they wanted to make you look foolish. The $10 million was what we, inside the government, refer to as sustainability money. It is unspent money from operational accounts for training, office supplies and headquarters costs. The could not us it for disaster response. We transfer unused sustainability money between our military installations, USDA, FEMA or even State Department. It is the money we, in the government, use as part of our budget to just keep operational. Now, all that being said, this is also the money that if we don’t spend it ALL the government cuts it from our next appropriation and tells you they saved the much money. I am sure the article was published just to sucker a few people in that don’t understand how our Congress works in order to make certain people look stupid because they don’t understand what Congress did. we have a term for different appropriations of different money in the government. We call it the “color of money”. Money of certain “colors” (appropriations) can only be used for certain functions. Don’t worry about this mistake. They set you up to look silly and that is unfair. Stay cool.
Russian, read the link. FEMA got shorted and right in the middle of hurricane season. In fact, trump’s FEMA is so broke that:
“More than 1,000 Puerto Ricans, displaced by last year’s hurricanes, have been living temporarily in hotels and motels throughout the country while they await more permanent housing alternatives — major repair to their own homes, for example, or help finding a new place to live. But they are now bracing for the likelihood they will become homeless this week.” https://thinkprogress.org/fema-will-kick-1000-displaced-puerto-ricans-out-on-the-streets-this-friday-45acad1ef0b1/
Mr. Larson was spot on with his assessment, spot on. We are gonna have to print more money and lots of it. How much for a loaf of bread? A pound, no not the bread, how much money it will cost in worthless paper? Oh, that pound.
This is my favorite part “think progress”. Yet all they talk about is how they don’t understand how our government, as screwed up as it is” doesn’t meet what they think should happen and it happens to be “this” administration’s fault yet it has been like this since Carter. I’m not saying the optics of what happened are good. What I am telling you is the transfer of the money was not nefarious but rather “standard operations” based upon Congressional requirements. It would have happened like this regardless of which party were in control.
Oh they get it alright, it is only paid Russian dunces like you who do not.
Drumpf asked someone why he couldn’t erase the debt simply by printing more money.
https://qz.com/1387565/trump-told-gary-cohn-to-print-money-to-repay-the-national-debt-thats-bananas/
Hurricane Maria could cost Puerto Rico $45 billion to $95 billion in damage — a devastating blow to the island’s already ailing economy.Sep 28, 2017
Uh, FEMA”s budget for disasters for the 2018 hurricane/fire season is a robust 7.4 billion bucks.
I am no math wizard, but I’m guessing if Hurricane Florence is expected to be one of the worst ever, FEMA’s budget is not gonna cut it.
OldSarge, I think one thing that is not static in saying that this transfer from FEMA is “standard” procedure is that it does not take into account changes in needs of emergency responses from climate change. That “standard” procedure needs to end because FEMA has higher needs and responsibilities in a time of more storms caused by our changing of our environment. As the President is a devout denier of this change, his acting as if things are not different since Carter is poor decision making – again sticking to dogma over evidence.
And today, the President is denying the death count from Puerto Rico from Katrina.
Allow me to ask directly: OldSarge, are you pro-deficit?
No worries!! The President believes the government can just print more money to pay the debt with. Done-and-done.
https://qz.com/1387565/trump-told-gary-cohn-to-print-money-to-repay-the-national-debt-thats-bananas/
o, he actually believes that is how a trade war and everything else is won and done, just print more money. Print and spend republicans like Dusty think that is just swell.
Print more money. How utterly ignorant.
Transfer money from FEMA to ICE. How short-sighted and misprioritized. (Hurricanes do more damage to Americans than undocumented immigrants.)
Darin, Ror, Donald, and O: how thoroughly instructive.
O, I predict that, if OS dares answer your direct question about his position on deficits, he will say something like, “It doesn’t matter, cry all you want,” and then will detour to some other issue he’s already been taught to holler about by whatever his preferred media told him to this morning.
OS can cry all he wants. It doesn’t matter. The Republicans have shown that they don’t really care about deficits. Republicans want to starve the government to serve their rich friends and to self-fulfill their diagnosis of government as bad and ineffective. Republicans lack the foresight and will to really invest our money in projects that benefit everyone. O and Donald in particular explain that point well, complete with historical observations. Making up any other explanation for Republicans’ shifting rhetoric requires far too much work.
Accept the simplest explanation: Republicans give not one darn for keeping their word. They will say whatever suits their immediate situation to gain and keep power.
Cory,
What has Trump not tried to do that he ran on? He is trying to do almost everything he said he would do. The last time a President did that was Reagan.
The fact is that Democrats promise Heaven and deliver Hell.
I can give you multiple examples of dems and repubs promising stuff they didn’t do.
I think your problem is Trump isn’t lying about what he said he would do.
On Day 1 I will repeal and replace Obamacare. uh, no
I will build a wall and force Mexico to pay for it. uh, no
I will defeat ISIS. not even close
I had the largest electoral victory ever. nope
Largest inaugural crowd than Obama. in your fever dreams
I won the popular vote if 3-5 million illegals hadn’t voted for HRC. pants on fire X 100
Fact Checker Analysis
President Trump’s Four-Pinocchio complaint about the Maria death toll figures
How many people died in Puerto Rico as a result of Hurricane Maria?
4 Pinocchios is as bad as pants on fire lies, Jason.
trump has bankrupted us so badly that we are stealing from ourselves to fund the children concentration camps. $202 million and counting that is not accountable by elected officials called congress. Dusty thinks that NOem and trump can steal without issue. Why would we want another thief in Washington? You do know that we are all gonna have to pay this back…correct? We always do.
“The Department of Homeland Security transferred $169 million from other agencies to Immigration and Customs Enforcement for the detention and removal of migrants this year, according to a document sent to Congress by DHS.
Many of the transfers came from key national security programs, including $1.8 million from the Domestic Nuclear Detection Office, $9.8 million from FEMA, $29 million from the U.S. Coast Guard and more than $34 million from several TSA programs. DHS also transferred $33 million from other ICE programs to pay for detention and removal, making the total amount of money transferred $202 million.” https://www.nbcnews.com/politics/immigration/dhs-transferred-169-million-other-programs-ice-migrant-detention-n909016
Kind of makes you wonder what that national security stuff really is, seems like a piggy bank for when you need to put a bandage on a seething wound…called mismanagement. Had Enough Yet? Vote Democratic at all levels.