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Thanks to tax cuts and spending increases, US deficit estimates are spiraling up. Let's investigate some estimates.
Bipartisan Deal Makes Shows Republican Hypocrisy
The deficit projection chart is from the New York Times article Budget Deficits Are Projected to Balloon Under the Bipartisan Spending Deal
Spending Projections
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$716 billion dollars a year for "defense" is absurd.
US drone policy, dropping bombs indiscriminately, and never ending wars are all extremely counterproductive.
Republicans are only interested in spending cutbacks when they do not control the White House.
Compromise is as it always was: reckless spending by both parties.
Big Government is Back
The New York Times proclaims Republicans Learn to Love Deficit Spending They Once Loathed.
Big government is officially back in style. Republicans propelled themselves to power in Washington by promising an end to fiscal recklessness. They are now embracing the kind of free spending and budget deficits they once claimed to loathe.
On Friday, Congress passed a bipartisan spending deal that blows through the caps imposed by the 2011 Budget Control Act, unlocking $300 billion in additional spending for the military and domestic programs over the next two years. That comes on top of last year’s $1.5 trillion tax cut package and as the White House prepares to unveil on Monday a $1.5 trillion infrastructure plan that would require $200 billion in government funding.
While the White House says it plans to offset that $200 billion through unspecified cuts, none of the other spending is paid for at a time when the nation’s debt already tops $20 trillion.
“With this deal, we will experience trillion-dollar deficits permanently,” said Andy Roth, vice president of the conservative Club for Growth. “That sort of behavior, the last time I checked, is not in the Republican platform.”
“I think it’s a little bit surprising and puzzling,” said Jason Furman, a former chairman of Mr. Obama’s Council of Economic Advisers, noting that trillion-dollar budget deficits is uncharted territory during a period of full employment. “We’ve never had anything like that outside of a war or a recession.”
Rosy Look
I promised a "rosy look" at this grim pictured. Here it is:
The nonpartisan Committee for a Responsible Federal Budget projects that the United States will run $2 trillion annual budget deficits by 2027 and have a debt-to-gross domestic product ratio of 105 percent — a level not seen since the end of World War II.
That rosy look assumes no recession, no additional spending "compromises", no infrastructure spending impact, and $200 billion in unspecified cuts that will never happen or will be quickly unagreed to.
With those rose colored glasses on, deficits will run "only" $1.2 to $1.5 trillion, increasing to $2 trillion by 2027.
This kind of ridiculous waste goes on decade after decade. Read more on the waste reports here: https://t.co/VlK4BG7khK pic.twitter.com/L7iRtbpeJe
— Senator Rand Paul (@RandPaul) February 8, 2018
Dear @RandPaul It's hard to get excited over $500k when we are blowing $761 billion on defense, half of it wasted. https://t.co/emaJkdChbi
— Mike Mish Shedlock (@MishGEA) February 9, 2018
Reader Dave, a friend, pinged me with his comments on the above stories. "The deficits right after the 2008 financial crisis were a combination of safety net spending and countercyclical spending. I think that the addition to national debt will be at the upper end of the estimates (close to $3 trillion) rather than the commonly cited figure of $1.5 trillion."
I agree, but add this caveat: Both of us may be quite a bit optimistic.
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