Roads to Ruin
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o you enjoy spending time thinking about the federal budget? Nah, me neither. They don’t call economics “the dismal science” for nothing. But desperate times call for desperate pleasures, so let’s take a happy look at how two potential outcomes of the election this fall would impact our nation’s bottom line.
irst, I don’t really want to shock you—so brace yourself—but when Donald Trump talks about American’s financial condition…he lies:
Remember when he said he’d beat Obama’s late term economic performance by goosing economic growth by four, five, even six percent? He lied.
Remember when he said the tariffs he mandated would pay off for Americans? He lied.
Have you heard him say he did away with the inheritance (“death”) tax? He lied.
Most of all, remember when he said he’d get rid of the entire federal deficit of $19 trillion (when he took over) if we gave him eight years? Well, hopefully he only gets four, but his track record so far is abhorrent. He’s added $4.7 trillion to that in just three years—and he knew he would all along. He lied again.
But the cornerstone of this conspiracy was his ballyhooed tax cut that would, he vowed, “pay for itself” with record economic growth—which, as we said above, never happened. This was not only a lie, it wasn’t even original—Ronald Reagan first promised “trickle down” growth in the 1980’s. A parade of GOP clowns followed suit—always failing.
The passage of that cut was a bald-faced giveaway of your tax dollars to the ultra-rich and the biggest corporations. And it resulted in a temporary sugar high for the economy, like an eight-year-old binging on Halloween night. But now it’s the morning after, and the results aren’t pretty. Growth was just 2.2% last year—not bad—but essentially just what it’s averaged over the last two decades. In other words, the tax cut didn’t work. Business Insider said all it bought Trump was “embarrassment.”
But more to the point, did it do harm? You bet.
The independent Congressional Budget Office says Trump’s current economic flight plan will carry us to the dizzying height of $36 trillion in debt by 2030—about $16 trillion higher than when he took office. The number is so big it numbs the mind. But should we worry?
Have no fear. This is what Trump said: “who the hell cares about the budget? We’re going to have a country!” Huh?
Hard to believe this guy filed for bankruptcy four times, isn’t it?
his kind of idiocy seems to deal a lay down hand for voters. Either of the Democrats has got to be better than this, right?
Wrong.
Bernie Sanders—the arch rival of fiscal wrongdoing—is worse.
If you’ve been listening at all, you know what he proscribes. A mandatory, single-payer, government-run health care plan for everybody. A guaranteed job for everyone, paying at least $15/hr. Free college for all, and forgiveness of college loans held by those already graduated. Trillions more to combat climate change and create clean energy. Paid family leave. Expanded budgets for infrastructure, Social Security, housing and public education.
And to pay for it, he admits there will need to be increases in everyone’s taxes (not just the rich), plus and an added income-investment surtax on the wealthy.
Bernie’s identified rewards are great. And most people understand that to get all this there’s got to be some boosted revenue stream. The problem is the math doesn’t add up. Not nearly.
Sanders’ dream is so ill-defined that no reasonably accurate budget numbers are attached. But a prominent (and decidedly right-leaning) economist, Brian Riedl, has taken a stab at it. Here’s his simple calculation:
Remember, this is added to the current debt. If we want to properly ridicule Trump for going another $16 trillion into debt…what do we say about Bernie, who wants to dump almost five times that much onto taxpayer shoulders? This is beyond unconscionable. (Some of Sanders’ people will mumble that it might be more like a $60 trillion price tag…but that’s still more than twice as bad as Trump’s plunge.)
Now, would the country be better off with Sanders’ proposals? It’s a matter of opinion, but mine is yes—America would be MUCH better off.
But Bernie is just as blithe as Trump in suggesting we shouldn’t bother looking behind the curtain. In his own way, he’s also claiming, “who cares?”
Bernie makes a point of not saying this out loud, but his magical unicorn solution is something called modern monetary theory. It’s a wonkfest battleground for economists. For our purposes, it’s a belief that a country as big as America, which operates on its own currency, can just print as much money as it needs to pay for all those plans—just as long as it keeps inflation under control. And how, exactly, do they propose to control that inflation? Apparently, they’ll cross that bridge when they get to it.
Trump and Sanders would both walk us down a path to enormous pots of debt at the end of their rainbows.
am lucky enough to be close to a wide range of young voters who are concerned about key issues—and first among them is climate change. After all, the longer you live, the more it’s going to affect you. These folks will be around three, four, five decades from now to watch it all play out.
But there’s a companion crisis that will also be unfolding for decades. It’s the federal debt. What if there’s no money to pay for fighting climate change--the conversion to clean energy, and the necessary repairs for the forests and beaches and farmlands that are disappearing?
Plus, this fiscal crisis also has a demonstrated social justice component. What communities do you guess would be most penalized by joint ecological and economic disasters? Again, what if there’s no money?
There’s an old saying that “money talks.” Right now, whether you lean left or right in the election, you can hear that money squealing as it’s transformed from useful currency into a crushing debt load.
We’re confronted with two very different political agendas—each mapping a road to ruin.
But is anybody listening to what the money is saying?
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