It doesn’t take a PhD. in either economics or math to figure out that Trump’s economic policies will substantially increase the national debt. From Tyler Durden at zerohedge.com:
Last week, when looking at the divergence between Donald Trump’s proposed fiscal plan to “make America great again” on the back of an unprecedented fiscal stimulus boost which is expected to add $5.3 trillion to the debt over the next decade…
… and the deleveraging fiscal plan espoused by House Republicans…
… we pointed out something disturbing: the two plans were roughly $12 trillion apart over a cumulative ten year period, a difference equal to more than one-quarter of total federal outlays.
Then earlier today, none other than Fed vice chair Fischer issued a clear warning to the new administration:
FISCHER: NOT A LOT OF ROOM TO INCREASE U.S. DEFICIT WITHOUT ADVERSE CONSEQUENCES DOWN THE ROAD
adding that there “enormous uncertainty around new US fiscal policies.”
Judging by the market’s reaction, there is little uncertainty, although that statement is certainly accurate for members of Congress who appear to have finally woken up to what Trump’s policies mean for the US.
The result is the first major problem to emerge for Donald Trump’s economic policies.
Perhaps the GOP read over the weekend what we reported, or maybe did the math on their own, but as The Hill writes this morning, Republican lawmakers warn that there could be a major obstacle to enacting President-elect Donald Trump’s agenda: the national debt.
The website once again lays out the generic framework of Trump’s plan: “Trump called during the campaign for a $1 trillion infrastructure package, $5 trillion in tax cuts, increases in military spending and the repeal ObamaCare, which could cost more than $350 billion over 10 years. At the same time, the president-elect has promised “not to touch” Social Security or make cuts to Medicare. The cost of Trump’s plans and the lack of concrete details on how to pay for them could become a problem for congressional Republicans next year, especially when they are faced with raising the nation’s $20 trillion borrowing limit sometime after March.”
“I was disappointed that it wasn’t brought up in the campaign — anybody’s campaign really — it really wasn’t mentioned,” Sen. Jeff Flake (R-Ariz.) said of deficits and debt.
“So I’m very concerned about it. It’s going to be tough to address if there’s no push from outside of the Congress,” he added. “I’m very concerned about it. It’s the biggest problem we face, by far.”
Conservative groups are worried as well. They say Republicans must not lose sight of fiscal restraint now that they are set to control the White House and Congress.
“We did not hear anything about entitlement reform from either of the candidates, and that’s a serious issue,” said Michael Sargent, a research associate at The Heritage Foundation. “You cannot address the growth in spending without addressing entitlement issues.” Well, perhaps if the campaign was engaged in non-stop daily midslinging between Trump and Clinton, someone would have “heard” about it. Alas, now it is a little too late.
To continue reading: A “Big Problem” Emerges For Trump’s Economic Plan
