WASHINGTON: More massive than the US economy, the national debt hit a new record of $22 trillion under President Donald Trump but Republicans who traditionally rail against debt and deficits have remained mum.
The sum of borrowing to cover chronic deficits as well as growing interest payments, this mountain of debt already stood at $19.95 trillion when Trump entered the White House, reaching the equivalent of US GDP for the first time since World War II, reports AFP.By comparison, France’s debt, which also is about the same as its GDP, amounted to a little more than 2.3 trillion euros (about $2.6 trillion) in late September.
The massive corporate tax cuts that Trump pushed for at the end of 2017, and the surge in spending, especially in defense, have increased the fiscal deficit for the world’s largest economy.
“If we don’t have a strong military, you don’t have to worry about debt, you have bigger problems,” Trump told reporters last week.
Administration officials continue to argue that the tax cuts, which are expected to widen the deficit by $1.5 trillion over 10 years, will pay for themselves by boosting economic growth and thereby increasing tax revenues.
But despite faster growth, the budget deficit climbed 17 percent to $779 billion last year, the worst since 2012. And according to the non-partisan Congressional Budget Office (CBO), the deficit is expected to widen further this year to $900 billion.
The United States saw a budget surplus for four years under Democratic president Bill Clinton, amid a booming economy, but the war in Iraq under Republican George W. Bush once again plunged federal finances into the red.Democratic president Barack Obama had to deal with the aftermath of the 2008 global financial crisis that required a ramp up in government spending, causing the federal books to deteriorate badly.
That helped fuel the birth of the Tea Party, a populist political movement that contributed to Trump’s rise to power.
With the economic recovery and the standoff in the Republican-controlled Congress forcing cuts in public spending, the last few years of the Obama administration saw a decline in the deficit.
But when it started to surge again under Trump, the Republican deficit-hawks were strangely silent.
Beyond the politics, however, the aging US population with the accompanying increase in health and pension expenditures is the structural issue that is the primary cause of chronic US deficit.