President leaves a legacy of crippling debt which will wreak havoc for decades
The national debt has risenby almost $7.8 trillion during his time in office
ONE of US President Donald Trump’s lesser known but profoundly damaging legacies will be the explosive rise in the national debt that occurred on his watch.
The financial burden that hehasinflictedontheUnited States government will wreak havoc for decades.
The national debt has risen by almost $7.8 trillion (€6.4 trillion) during Mr Trump’s time in office. That’s nearly twice as much as what Americans owe on student loans, car loans, credit cards and every other type of debt other than mortgages, combined, according to data from the Federal Reserve Bank of New York. It amounts to about $23,500 in new federal debt for every person in the country.
The growth in the annual deficit under Mr Trump ranks as the third-biggest increase, relative to the size of the economy, of any US presidential administration, according to Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Centre. And unlike George W. Bush and Abraham Lincoln, who oversaw the larger relative increases in deficits, Mr Trump did not launch two foreign conflicts or have to pay for a civil war.
Economists agree the country needed massive deficit spending during the Covid-19 crisis to ward off an economic cataclysm, but federal finances under Mr Trump had become dire before the pandemic.
That happened even though the American economy was booming and unemployment was at historically low levels.
By the Trump administration’s own description, the pre-pandemic national debt level was already a “crisis” and a “grave threat.”
The combination of Mr Trump’s 2017 tax cut and the lack of any serious spending restraint saw both the deficit and the debt soar.
So when the once-in-a-lifetime viral disaster slammed the country, there was no longer any margin for error.
The United States’ national
debt has reached immense levels relative to its economy, nearly as high as it was at the end of World War II. But unlike 75 years ago, the massive financial overhang from Medicare and social security will make it more difficult for the country to dig itself out of the debt ditch.
Falling deeper into the red is the opposite of what Mr Trump, the self-styled “King of debt”, said would happen if he became president.
In a March 31, 2016 interview with The Washington Post ,Mr
Trump said he could pay down the national debt, then about $19 trillion, “over a period of eight years” by renegotiating trade deals and spurring economic growth.
That’s not how it played out. When Mr Trump took office in January 2017, the nonpartisan Congressional Budget Office was projecting federal budget deficits would be 2pc to 3pc of gross domestic product during Mr Trump’s term.
Instead, the deficit reached 3.8pc of GDP in 2018 and 4.6pc in 2019. (© Washington Post)