Fueled by Donald Trump’s corporate tax cuts and large spending increases, the government announced that the federal budget deficit ballooned a whopping 17 percent to $779 billion in 2018.
This deficit has added to a national debt that now boggles the mind at $21.6 trillion. Yet the government, which is entirely run by a Republican Party that still rhetorically touts its fiscal prudence, keeps piling a heavier burden on the nation’s children and grandchildren, who cannot vote and may not even be born.
Yet, the party of fiscal responsibility always tells us that budget cuts are being identified. For example, Steve Mnuchin, Trump’s secretary of the Treasury, recently announced that President Trump had “proposals to cut wasteful spending” that would eventually restore fiscal sustainability.
But if history is any guide, most of these proposed spending cuts will never get passed, resulting in the accumulation of debt as Trump’s tax cuts continue. Even if you don’t count the spending increases, Trump’s tax cut, passed in 2017, will add almost to $2 trillion to the national debt.
Normally, when the economy grows, less money needs to be spent on social safety net programs and tax revenues bulge, reducing the deficit. But in this case, tax revenue has languished, spiking the deficit.
The problem in the long run has been that the Republican Party is no longer the party of Warren Harding, Calvin Coolidge and Dwight Eisenhower, but the one of Richard Nixon, Ronald Reagan, George W. Bush and Donald Trump.
Starting with Nixon, most Republican presidents have found that cutting taxes wins votes but that cutting popular government programs has the opposite effect. Therefore, these modern presidents have slashed taxes while cranking the spending spigot, benefiting them by increasing their political fortunes but harming the increasingly debt-ridden country.
Contrary to the rhetoric of the GOP, these modern allegedly “small government” Republican presidents have done even worse than recent “big government” Democratic presidents, who have bettered their Republican counterparts in restraining annualized change in federal spending as a proportion of GDP and reducing annualized change in federal deficits and national debt as portions of GDP.
Make no mistake about it, tax cuts are great, but they must follow spending cuts of greater value in order to gradually pay down the debt. Yet, Republicans love to cut taxes first and make promises about future spending cuts that they never keep.
In Trump’s case, he increased both domestic and defense spending. On the latter, Mnuchin justified such profligacy by telling a whopper: “President Trump prioritized making a significant investment in America’s military after years of reductions in military spending undermined our preparedness and national security.”
If the readiness of the most capable military in world historyboth absolutely and relative to other countrieshas deteriorated, its because of the eight-year military debacle in Iraq and the 17-year (and counting) quagmire in Afghanistan, not for a lack of funding.
The recently hiked $716 billion defense budget for fiscal year 2019 is roughly what the next eight highest-spending countries combined, including Russia and China, spend on their armed forces.
Yet, having vast ocean buffers as a barrier to spill over from wars in the world’s principal conflict zones and possessing the most capable nuclear arsenal as the “ultimate deterrent” against any conventional or nuclear attack, the United States could spend less on defense than most other countries.
If force preparedness is suffering, Trump should not only end the pointless Afghan War, which he instead has escalated, but significantly reduce the size of the militarywith some of the savings used to improve force readiness while using the bulk of them to reduce the national debt.
|Ivan Eland is Senior Fellow and Director of the Center on Peace & Liberty at the Independent Institute. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office.|
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