GOP and Trump put deficit on back burner

Anybody else shocked? Yeah, I didn’t think so:

A serious case of fiscal amnesia may soon be sweeping the GOP.

For eight years, Republicans hammered President Barack Obama for exploding the national debt. But now a GOP-led spending spree is coming, with Donald Trump riding to the White House on trillion-dollar promises and a Republican Congress that looks likely to do his bidding. It’s a potential echo of the last time Republicans ran Washington, when then-Vice President Dick Cheney memorably remarked, “Deficits don’t matter.”

Trump campaigned heartily on a spending splurge and nothing he’s said since his shocking election suggests he will reverse course. Republican leaders on Capitol Hill, meanwhile, are papering over divisions with the man who frequently tossed party orthodoxy aside on the trail.

“There is now a real risk that we will see an onslaught of deficit-financed goodies — tax cuts, infrastructure spending, more on defense — all in the name of stimulus, but which in reality will massively balloon the debt,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

The non-partisan group estimated Trump’s campaign proposals would increase the national debt by a whopping $5.3 trillion over the next decade. That would make the debt as a share of the economy rise from nearly 77 percent to 105 percent, a potentially dangerous level for the government.

1 Comment

  1. Watch out for infrastructure spending! An added danger of this spending is PFI (private finance initiative). Countries have turned to this as their credit limit is reached and they need to spend instead of cut.

    I heard it mentioned that Trump plans to use this method. It has a history in the UK, where it has ‘cost more than twice as much as projects financed by the public sector’.

    It means spending is hidden from the balance sheet and private companies take over large projects, but it’s highly leveraged and profits of 200% are not unknown.

    The result has been tax payers footing the bill as costs spiral, companies go broke and leave projects unfinished, while profits go to the companies. They also end up owning state assets.

    In the UK it’s been a financial disaster, costing more than the deficit. Maybe Trump will make it work.

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