WHEN BOB WOODWARD SHOOTS YOU DOWN, YOU’RE IN SERIOUS TROUBLE

…Once again, Trump earns “Four Pinocchio’s” for his untruths.

 

Trump’s number just don’t come close to adding up.

 

Donald Trump should never have given an interview to the Washington Post, especially when it is with the infamous Bob Woodward of Watergate fame.

 

The high point and overall result of the interview was that according to Trump, if elected, he would get rid of the $19 Trillion US debt in about 8 years.

 

This statement is so bogus, even afterwards, Mr. Woodward had to give Trump’s statement “Four Pinocchio’s”.  For those that are not aware of what that means, that’s what is also referred to as a “Pants-on-fire-lie”.

 

When Woodward hit Trump with, “That’s $2 trillion a year!”  Trump’s response was that by negotiating different trade deals, the $19 trillion would miraculously disappear. 

 

If it is actually possible for Donald Trump to say his most stupid statement ever, the idea that he could eliminate the nation’s $19 trillion in debt in just eight years, simply by cutting better trade deals, that ranks at or near the top.

 

Ok, I’m no financial genius, but in many ways, I’m way ahead of Trump.

 

Please take note, eliminating a trade deficit does not mean the money ends up in government coffers.  That’s not how it works.

 

Before Trump or anyone can start paying down the nation’s debt, they needs to eliminate the deficit.  The federal budget is already running an annual deficit.  Every year, this issue adds to the national debt owed to US bondholders.

 

Trump says that he can manage this simply by cutting better trade deals.  If that were the case, don’t you think it would have been attempted years ago?

 

In addition, once again, Trump is wrong that the trade deficit with China is $505 billion.  According to the US Census Bureau, it’s $366 billion.  The trade deficit with all countries, world-wide is $531 billion.

 

So, why are deficits expected to climb? Well, with baby-boomers like me, we are retiring at a significant rate, and we are running up the cost of mandatory spending programs such as Social Security and Medicare. Trump has pledged not to touch this entitlement spending. (In fact, he has wanted to raise this spending, plus raise it for the vets.) 

 

Unless he wants to start breaking some campaign promises, he would need to change the laws governing most mandatory spending.  (Note: Today, the federal mandatory spending is 72% of the national budget.)

 

In addition, since Trump has ruled out raising taxes, no one can eliminate deficits just with higher revenues.  In fact, Trump wants to cut taxes significantly. In theory, the government could gain additional revenue if the economy does better than projected, so let’s assume Trump’s trade initiatives don’t lead to trade wars and recessions as has been predicted.  What’s reasonable to expect?

 

Well, according to a recent projection by the Congressional Budget Office (CBO), the federal government will run an additional $6.8 trillion in deficits between 2017 and 2024. So the task is not $19 trillion, but almost $26 trillion over the next eight years. 

 

That leaves discretionary spending, this is the funding that Congress deals with year after year which funds the annual government’s needs.  This includes defense, homeland security, highways, etc.  In Trump’s potential eight year, two-term presidency, the CBO projects $10 trillion in discretionary spending.  So if Trump cut every government function and shut down every Cabinet’s agency, he’d still be $16 trillion short.  How’s that for dealing with the nation’s debt and deficit?

 

Trump could deal with debt by raising taxes.  But remember that Trump has ruled out raising any taxes.

 

The CBO projected revenues would be about 18.1% of the gross domestic product in the 2017-2024 period. In checking the historical records it was found that revenues in the last half century once reached a peak of 20% of GDP in 2000 during the Bill Clinton administration.  That was the last time the government ran a budget surplus.

 

But even if revenues achieved 20% of GDP year after year, that would only add an additional $4 trillion in revenue over eight years. (We are assuming the elimination of basic government functions does not wreck the economy, which is highly unlikely.)  But Trump is still $12 trillion short. 

 

Now you know why Trump once again got Four Pinocchio’s from Mr. Woodward.

 

Copyright G.Ater  2016