Imagine you take out a loan at home, and now you want to pay it off. How do you go about doing that? The answer is really quite simple: You spend less money than you earn, and devote all or part of the surplus toward paying off the loan.
Federal deficits are more complicated, but at their core, they work the same way. The government earns much of its money through taxes, and surplus earnings can be devoted to bringing down the deficit.
This brings us to the president. Remember when he used to rail against deficits?
ALLY NOLL (audience member): “I’m Ally Noll, I’m Miss America’s Outstanding Teen…”
DONALD TRUMP: “Good!”
NOLL: “And I travel across the country and teach kids about saving money. Which is hard! Our government doesn’t, isn’t even fiscally responsible. So, I’m asking every single candidate, and I’ve been waiting to ask you…”
TRUMP: “In particular.”
NOLL: “Oh yeah, of course. So, specifically, what are you gonna do about the $18 trillion deficit?”
TRUMP: “Alright. Well, what we’re going to do, I mean we do, and by the way it’s not $18 trillion, it’s now $19 trillion. So we have now $19 trillion in deficits. $19 trillion, you know if you look, we owe! When I say that, we owe, this is what you’re talking about, we owe $19 trillion as a country. And we’re gonna knock it down and we’re gonna bring it down big league and quickly, we’re gonna bring jobs back, we’re gonna bring business back, we’re gonna stop our deficits, we’re gonna stop our deficits, we’re gonna do it very quickly.”
Here’s the thing, Trump can cut government spending by cutting government programs as he has promised he would do. But, he still needs to bring money in via taxes and enhanced economic productivity.
Economic productivity, in spite of Trump’s rhetoric, can’t grow fast enough to make a dent in the deficit, which is why tax revenues are crucial.
This is why Trump’s tax plan crosses the border from poorly planned to plain-old ridiculous.
Economists, regardless of their party affiliation, have come out against the Trump tax plan, estimating it would add trillions to the national debt over the next decade.
According to Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget, the magnitude of the tax cut is roughy $5 trillion, which is “simply unimaginable given our fiscal situation and the size of the deficit…”
Former Treasury Secretary Larry Summers went further: “I just don’t understand what could cause an administration to put its Secretary of the Treasury in a position to assert something that is generally regarded by economists as absurd.”
This is what happens when you put an unprepared and incompetent “businessman” in charge of the federal government.
Donald Trump is about to do to the United States what he did to his casinos in New Jersey: Run it into the ground.
And, the American people are about to get screwed in the process.
TGIF for the 28th of April, 2017. It’s not a normal day.