Trump Wants Credit for Cutting the Na­tional Debt

The Economic Times - - Finance & Commodities -

New York: Pres­i­dent Don­ald Trump asked on Twit­ter why the me­dia hasn’t re­ported that the na­tional debt has dropped since his in­au­gu­ra­tion. One ex­pla­na­tion, some econ­o­mists said: Trump couldn’t have had any­thing to do with it. “Any­thing that has hap­pened to the debt has been on au­topi­lot since Obama left,” said Lau­rence Kotlikoff, an eco­nom­ics pro­fes­sor at Bos­ton Uni­ver­sity. “If any­thing, he is tak­ing credit for some­thing Obama did.”

The pres­i­dent took to Twit­ter on Satur­day morn­ing to say that the na­tional debt de­clined by $12 bil­lion in his first month in of­fice com­pared with a $200 bil­lion in­crease in Barack Obama’s first month in of­fice. The tweet fol­lowed a Fox News seg­ment on which for­mer pres­i­den­tial can­di­date Her­man Cain made the same state­ment. Trump’s num­bers are ac­cu­rate. The na­tional debt of $19.9 tril­lion did de­crease $12 bil­lion — six­hun­dredths of 1% — from his first day in of­fice un­til his 30th. It’s also true the debt fluc­tu­ates by bil­lions of dol­lars each day, and the cur­rent spend­ing and tax rev­enue lev­els that drive those short-term vari­ances were set by the last ad­min­is­tra­tion. Trump hasn’t had a chance in his first weeks to change the level of rev­enue col­lected through higher taxes or cut fed­eral spend­ing through a new bud­get.

The $14.4 bil­lion in debt held by the pub­lic, rather than as se­cu­ri­ties in gov­ern­ment trust funds, was $94 mil­lion lower on Fe­bru­ary 21 than on Jan­uary 20, when Trump was in­au­gu­rated. But the fol­low­ing day, the debt level popped back up more than $1 bil­lion due to reg­u­lar changes in spend­ing and rev­enue.

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