Wishful thinking, again: Trump offers up gross fiscal irresponsibility

If you refuse to touch entitlement spending (Social Security, Medicare, Medicaid, etc.) and are intent on increasing military spending (which, arguendo, may actually need to be done) then you have put about 80 percent of the federal budget beyond the reach of any budget-cutting exercise.

Thanks to congressional Republicans, the deficit is today much smaller than what it was during the reign of the triumvirate of Barack Obama, Harry Reid, and Nancy Pelosi, but we still run a deficit. The Congressional Budget Office projects that under current law — which is to say, even without Trump’s proposed $1 trillion stimulus — federal spending will grow by about 60 percent in the next ten years, driven largely by the parts of the budget that nobody wants to touch: entitlements. Federal spending as a share of GDP is expected to remain higher than its average over the last 50 years. If Republicans should decide to get rid of the unpopular parts of the Affordable Care Act (the taxes and individual mandate) and keep the popular ones (the subsidies), then you can expect that number to get even worse.

And much of this assumes that the interest rates on all that federal debt stay at levels that are by historical standards unusually low. A return to the historical average would mean a Pentagon-sized hole in federal finances, and there is no reason to believe that the average is the top limit. The CBO doesn’t think those rates are going to remain low: It already is projecting that interest payments will double (as a share of GDP) over the next decade.

Beyond this gross fiscal irresponsibility, what did Trump propose? A lot of federal commissions and blue-ribbon task forces writing a lot of reports. That and another expensive new entitlement: paid maternity/paternity leave.

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