President Trump’s Tax Cut isn’t paying for itself as promised.
By James DiGeorgia
It appears the federal government is going to need to borrow a total of $1.3 trillion this year to cover new debt which is more than double the amount borrowed in 2017 and the most significant annual borrowing figure since 2010, according to new estimates released by the U.S. Treasury Department.
This increase in debt is gargantuan as measured by historical standards. In just two years the Trump Administration with the full support of the GOP Congress and Senate had borrowed more money, in nominal terms than it did in both 2009 and 2010 when the United States was dealing with the greatest economic downturn since the Great Depression.
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This increased borrowing to finance the $1.5 trillion in tax cuts passed late last year Republicans in Congress and signed by President Trump combined with his questionable economic policies including his World-Wide Trade War, is already driving up interest rates which means that every dollar the U.S. government is borrowing will be more costly to pay back.
The mammoth rise in borrowing and debt isn’t any surprise. The Congressional Budget Office warned that Trump's insisting on his tax cut for the rich would cause the government to burn through cash more quickly because the tax cut would not pay for itself as promised, and now the reduced tax revenue that has resulted is going to worsen the United States debt further.
The U.S. Treasury is no projecting it’s going to need to borrow significantly more this year, a sign that President Trump and the two houses of Congress controlled by the GOP has yet to come to terms with the total negative effect of the tax cut bill for the rich is having on our nation’s balance sheet.
In February, for example, the U.S Treasury had expected that it was going to need to borrow for $955 billion in 2018, but now it expects to need to borrow $1.3 trillion which amounts a 36% jump over the borrowing estimate used by the Trump and GOP when it passed the tax cut for the top ½% of Americans and businesses. Had that number been revealed at the time Trump and the GOP tax cut was being considered – would have literally – automatically made passing it impossible by the long-standing rules of the Senate. Trump and the GOP refused even to allow enough time for the Congressional Budget Office to score the cost of the tax bill.
Trump and GOP Washington officials and representatives insisted their tax cut legislation, promised that the tac cut to the rich would serve to reduce the federal debt, even though similar tax cuts under Presidents Ronald Reagan and George W. Bush proved that tax cuts for the wealth and business just sent the U.S. debt spiraling higher. The increase in the national debt also had a negative impact on the U.S. economy eventually that lead to the 1989-1992 economic down turn. The latest Treasury accounting of the explosion in Federal Debt taking place suggests that history may be repeating itself.