Monday, February 6, 2023

More Deficits


This balloon fiasco might emerge as a true symbol of these Washington people. Mendacity and ineptitude in the service of self-advancement.

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Do we have a political process that somehow excludes serious people?

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The world is a dangerous, messy place, but not particularly for America. The US is dominant at home, flanked by enormous bodies of water and bordered south and north by weak, peaceful neighbors. Washington’s overseas intervention is almost entirely discretionary, utterly disconnected from anything close to a vital interest. Instead, America has created a defense dole for the world, by which industrialized states uniformly shirk responsibility for protecting themselves and their regions.

The US economy no longer can sustain a policy of endless war. Rising interest rates highlight the dismal state of Uncle Sam’s finances. Fiscal reality, as well as good sense, tells the US to focus on its own security.--Bandow

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More Deficits

When President Trump entered the Oval Office, CBO projected the cumulative 2017–2027 budget deficits would be $10.0 trillion. When he left office four years later, CBO’s projected deficits for the same period were $13.9 trillion. The president signed or enacted $7.8 trillion in new initiatives, the costs of which were partially offset by $3.9 trillion saved from economic growth revenues and technical re-estimates of taxes and spending levels.

Economic and technical factors produced a substantial $3.9 trillion in actual and projected savings over this period. Of this amount, $2.7 trillion comes from falling interest rate projections, which reduced the projected cost of net interest on the national debt. Another $1.3 trillion comes from higher tax revenues produced by faster economic growth projections. Technical re-estimates have reduced mandatory spending projections but also tax revenues. Most of these savings are projected to occur later in the 2017–2027 period and thus may not materialize if economic growth slows or interest rates rise.

President Trump signed legislation and approved executive actions costing $7.8 trillion over the decade—compared to $5.0 trillion for President Obama and $6.9 trillion for President Bush, and he enacted these costs in just a single four-year presidential term, compared to his predecessors’ eight years in the Oval Office. The largest drivers were pandemic relief legislation ($3.9 trillion), the 2017 tax cuts ($2.0 trillion), and legislation raising the discretionary spending caps ($1.6 trillion).

President Trump’s four annual budget proposals were scored as reducing budget deficits by $2.4 trillion over the subsequent 10 years. Nearly all proposed savings came from repealing and replacing Obamacare, as well as vague promises to cut domestic discretionary spending nearly in half. Outside of the budget documents, President Trump did not aggressively push either initiative after 2017.

Trump left the White House with the largest peacetime budget deficit in American history and a national debt exceeding 100% of the economy for the first time since World War II. The failure to address unsustainable Social Security and Medicare costs leaves a projected 30-year baseline deficit of $112 trillion.

$112 TRILLION.

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