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President Trump Promises Debt, Default And Depression

The U.S. faces a certain economic cataclysm if Donald J. Trump becomes the 45th President of the United States.
President Trump Promises Debt, Default And Depression
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If nothing else, presumptive Republican presidential nominee Donald Trump showed again this week that he hasn’t lost his ability to shock. In his on-going war on common sense and basic math, the would-be businessman-president vowed he would reduce America’s $19 trillion national debt by paying U.S. creditors less than full value on the Treasury bonds they hold. “Experts see it as a reckless idea,” the Washington Post helpfully explained, “that would send interest rates soaring, derail economic growth and undermine confidence in the world’s most trusted financial asset.”

But even before his proposal dismissed by his own campaign finance chairman Steven Mnuchin (“Obviously, the government has to honor its debts”) and by former Bush PR flack Tony Fratto as “insane,” Donald Trump was already predicting a “major recession.”

As it turns out, there is only one scenario in which the United States will surely experience a cataclysmic economic disaster of biblical proportions. That meltdown is inescapable if Donald J. Trump becomes the 45th President of the United States.

There's no mystery as to why. Trump's combined promises to boost defense spending, deliver massive tax cuts for the wealthy and to eliminate the national debt in 8 years would necessarily require gutting federal spending by about 80 percent, reductions so draconian that the U.S. economy might never recover.

Consider the basic math:

  • The United States currently has a national debt of around $19 trillion.
  • In its most recent 10 year forecast, the non-partisan Congressional Budget Office predicted spending over the next decade would reach $51.4 trillion while tax revenue would amount to $42 trillion. That means that barring any policy changes, Uncle Sam will run up over $9 trillion in new deficits.
  • But would-be President Trump is promising gigantic policy changes. Citizens for Tax Justice estimates his tax proposals would drain up to $12 trillion in revenue from the United States Treasury over a decade. By the end of his second term, President Trump would be on track to produce a national debt of $40 trillion (19+9+12) by the end of 2026.
  • Yet the Donald says America can avoid those oceans of red ink because he can magically eliminate the national debt "over a period of eight years." Both impossible and undesirable with today's projected $19 trillion debt, Trump's pledge is sheer delusion when the figure balloons to $40 trillion during his White House tenure.
  • Making his boast even more comically pathetic, Trump has repeatedly promised not to cut entitlement spending on programs including Social Security and Medicare. As Jonathan Chait pointed out in November when reviewing Marco Rubio's slightly less insane plan, "According to figures from the Center on Budget and Policy Priorities, expenditures on defense, Medicare, Social Security, and mandatory interest payments on the national debt will total $30.7 trillion over that period -- and that's without accounting for any other functions of the federal government at all. So Medicaid, veterans' health insurance, transportation, border security, and education, not to mention the entire federal anti-poverty budget other than Medicare and Social Security, would have to go."

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Leaving aside Trump's 8-year time-frame compared the CBO's 10-year forecast, we're talking about cutting $40 trillion from a $51 trillion budget--approximately 78 percent. And it's not just that Trump literally can't get there from here. The U.S. economy would be a devastated hellscape if he could get anywhere close. As ThinkProgress pointed out when a balanced budget amendment was being kicked around Congress four years ago, even those comparatively modest cuts would produce an economic calamity on the scale of the Great Depression:

If the 2012 budget were balanced through spending cuts, those cuts would total about $1.5 trillion in 2012 alone, the analysis estimates. Those cuts would throw about 15 million more people out of work, double the unemployment rate from 9 percent to approximately 18 percent, and cause the economy to shrink by about 17 percent instead of growing by an expected 2 percent.

To put it another way, putting Donald Trump in the White House wouldn't "Make America Great Again." It would create a self-fulfilling economic cataclysm so horrific that Americans could only dream of a "major recession" under President Trump.

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