Trump and the debt
— Here is an issue where Donald Trump could fail as president and the country would pay mightily: the federal debt.
He did refer to it during the campaign, saying his growth plans could whip the problem, but some of his announced policies could actually exacerbate the threat. They include leaving Social Security untouched, reducing taxes too much and barreling ahead with spending plans.
Republicans will cower and Democrats will try to destroy him if he moves in some right directions, but none of this diminishes what has been said by a host of bipartisan sources. Right now, the debt is at $20 trillion, equivalent to $158,604 per household and 75 percent of gross domestic product. It’s expected to go up to 84 percent of GDP by 2025 if Social Security and Medicare are not adjusted. Here are some of the possible consequences as increases happen.
Stalled economic growth and likely the reverse. Much higher taxes. Wages hurdling down. Investment crashes. Living standards flat on their back. Little money in the budget for anything but entitlements. And finally, a fiscal crisis shaming past ones as nothing much.
A major issue is Social Security, ready to zoom to madness as baby boomers start retiring en masse even as Hillary Clinton, to mention a recent presidential nominee, wanted to increase its benefits. She said she would pay for them — not the other increased costs — through raising caps on the rich. Of course, if you stuck to the Social Security formula that says the more you pay, the more you get, that would not do a lot of good. Trump said he would not touch Social Security, but it is already eating us up despite what many say.
They argue that Social Security is not now adding to the debt. Technically, that is true. When Social Security revenues aren’t spent immediately, they become a surplus, meaning essentially that notations are made. When the money the money is needed and spent, the notations are reduced. All is thereby OK? Not in the real world. The sur-
plus is not cash is sitting around some place or money being invested. Instead, the government spends like crazy on all kinds of programs, far outreaching any available revenues and causing the debt to go up enormously. When it comes time to take from the Social Security “surplus,” the debt is increased still more. In 2014, $74 billion was added to the overburdened debt to pay off Social Security beneficiaries, and here are my questions to naysayers.
If that money was not spent on Social Security, what was it spent on, and doesn’t this contribute to fiscal woes that could someday leave this nation flattened?
What Trump should consider is measures that won’t affect anyone less than the well-off anytime soon. He could raise the cap but also redo the formula so the rich won’t get more benefits. He could curb growth by lessening the initial amount given; right now, it increases so that someone this year who earned $50,000 will usually get fewer benefits than someone next year earning the same. He could raise the retirement age except for people in toughlabor jobs.
His repeal-replacement overhaul of Obamacare must reduce its costs significantly, something that won’t happen if he does nothing new about patients with pre-existing conditions.
Those treasonous to the national welfare on behalf of their own political interests will then try to prevent change as they have so disastrously before. But the national good should come first.
On his expenditures, such as redoing our infrastructure, he should seek out cuts elsewhere to pay for them. Lowering corporate tax rates would be great, but not lowering all the other taxes he has in mind. His repatriation of corporate profits overseas would be a boon. He needs to restrict his trade protectionism to cautiously revised details. He could maybe then get the economy up to 3 percent growth, but that alone will not erase the debt problem.
Jay Ambrose is an columnist for Tribune News Service. Readers may email him at firstname.lastname@example.org.