Never Were Truer Words Said

“I am the king of debt. I do love debt. I love debt.” -Donald J. Trump, May 2016 (WaPo)

The Committee for a Responsible Federal Budget has released its score of the Presidential candidates’ plans. Here is the trajectory of Federal debt under the two plans.

Debt under candidates proposals

Full report here.

Increases in debt are not always a bad thing, particularly in times of economic slack, if the debt accumulation is driven by stimulative fiscal policy. But a 40 percentage points of GDP increase seems unlikely to be a positive outcome.

25 thoughts on “Never Were Truer Words Said

  1. PeakTrader

    Borrowing is needed for a small business, particularly a capital intensive business, to grow into a large business. Little of that debt is wasted.

      1. PeakTrader

        The federal government in its attempts to do good without regard to consequences makes it harder for small businesses to grow. So, there’s more wasted debt with weak growth.

        1. baffling

          that alternative is probably better than the financial industry’s attempts to make profit without regard to consequences. we saw the result of their behavior in real time a few years ago. the result was significant wasted resources.

          1. PeakTrader

            The federal government in its attempt to help low income people own houses created a financial crisis and now the homeownership rate is at a 50 year low. Do you really want more government help?

          2. PeakTrader

            Menzie Chinn, if financial regulations were gradually tightened and capital requirements gradually raised, e.g. starting in 2004, the crisis could’ve been averted.

            However, that would’ve slowed the giant social program.

            We got more financial regulations and capital requirements after the crisis, along with a depression.

          3. baffling

            “The federal government in its attempt to help low income people own houses created a financial crisis….”

            you are wrong. this conspiracy theory has been refuted by all reputable people in economics. but i would expect somebody who was in the financial field, and a contributor to the financial crisis, and lost his job as a result, to want to find blame with others-such as the government.

            time to grow up and accept responsibility for the failures caused by the financial industry. lehman failed because of stupidity, arrogance and greed for profit. not the federal government.

          4. Peaktrader

            Baffling, even if I show you the evidence again (for the nth time), you’d still be in denial and defend government.

          5. baffling

            Peak, there are no credible economists who agree with your assertions. You seek out the political hacks who defend your assertions. You were part of the problem, and rather than accept responsibility for your misguided actions, you look to pass blame for your poor behavior onto somebody else. As I stated previously, nothing in the failed investments at Lehman brothers was a result of the federal government. It was purely a result of speculative reach for yield and profit with absolutely no consideration for possible negative outcomes. To blame the federal government for such greed is simply laughable. Continuing to double down on such foolishness is simply trumpian behavior.

  2. pgl

    A forecast through 2026. Of course if replace the CBO forecast of potential GDP in 2026 with the “analysis” by Gerald Friedman, the picture would look a lot better/

  3. Jeffrey J. Brown

    I’m reminded of a quote attributed to Joshua Lawrence Chamberlain* at a critical time and place at the Battle of Gettysburg:

    “We must attack or retreat. It must not be the latter. But how can it be the former?”

    Absent something unforeseen, the 45th President of the United States will be Clinton or Trump. It must not be the latter, but how can it be the former?


  4. Timothy Hughbanks

    Number of Trump supporters (erstwhile debt-hysteric teabaggers) who will change their votes in light of this or any sober analysis: 0

    1. 2slugbaits

      Right the first time. We would be in far better financial shape. Same with Hillary Clinton; we would be in much better shape. The Trump economic plan is a riot of nonsense and magical thinking.

  5. macroduck

    Trump’s folks have recanted on the huge tax cut. Now they are going for a big tax cut, instead. The initial cut would have added about $9.5 trillion to the debt over 10 years, relative to baseline. The new cut is claimed to add just $3.5 trillion. Not sure, though, whether details are available.

    I think the figure above is based on the $9.5 trillion addition to the debt.

    1. randomworker

      I’m gonna build a wall and have Mexico pay for it, believe me.

      I guess those 39 “serious” Republican candidates must feel like schmucks now for putting their real tax plans out there.

  6. rtd

    Sigh. The potential for quite the frightening future is rather large with the R’s choice…….

    1. PeakTrader

      Fear can be a great deterrent against bad things.

      We should be afraid of crony-capitalism, big government, and socialism.

      We need a government that works for the best interest of all Americans.

      And, even the Republican establishment doesn’t want Trump. Most of it was forced to accept him. Trump is shaking-up the entire Washington political establishment, which is running scared.

      1. Gridlock

        There’s a difference between “shaking up the system” and breaking system so that it never works again. Sometimes running away from destructive monsters is the right course of action.

      2. rtd

        The only shaking in the “political establishment” caused by Trump is from uncontrolled laughter – at him. Albeit, some of it may be nervous laughter at the thought of, even on the smallest of margins, such a candidate is plausible. I honestly don’t think the R’s making up the “political establishment” ever really cared about this election – it was Hillary’s to lose since 2012. All of their eggs have been in the Ryan 2020 basket for a few years now.

  7. Sherparick

    If Trump wins, no one will care about the debt, certainly not the Republicans in Congress, except as an excuse the defenestrate Social Security and Medicare. Trump of course has “promised” to protect these programs. We will see if that means the same as all the promises he made to Atlantic City and Trump University. The best model I can think of for a Trump Presidency is a combination of the Apprentice and last years of the Emperor Nero. With nuclear bombs. Stand by for a bumpy ride.

    1. PeakTrader

      We’ve already had Claudius and Nero. The Democrats have a giant-funded, extensive, and active machine to deal with Trump.

      The plan seems to be to redefine reality, pander to as many groups as possible, shovel lots of muck, and scare tactics. It will be a well-coordinated divide and conquer attack.

      However, Trump said he’s not going to play nice anymore 🙂

  8. Darren

    The difference is that Trump’s estimates are honest, while Clinton’s will be greatly exceeded for sure (if she is in office).

    It would be funny to see Obama’s estimates in 2008-09 vs. the actuals. The national debt rose from $9T to $19T under Obama. More than doubling in 8 years, that is much worse than any other post WW2 President even if adjusted for GDP.

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