If you listen to the two major candidates running for president, you might think that on Nov. 9 a sleigh pulled by flying reindeer is going to depart Washington, D.C., loaded with presents for the voters of this country. The only question is who will be driving the sleigh — Mrs. Claus or Mr. Claus — and which voters were naughty and which were nice.
What does Hillary have loaded in her sleigh? Let’s see, there’s a $350-billion package of college loan reductions and subsidies for higher education; $250 billion in infrastructure spending for clean energy, high-speed passenger trains and free wi-fi; $300 billion to expand Obamacare; $100 billion for child care and $350 billion of paid maternity leave; $100 billion for energy research; $150 billion of veteran’s care; and more than 50 little stocking stuffers like raising the minimum wage, billions in housing subsides, revitalization of coal communities, and subsidies for the import/export bank.
The total price tag is estimated by the National Tax Payers’ Union to be around $2 trillion over the next 10 years.
Donald Trump hasn’t been very specific about his presents. I guess he likes surprises. He claims he likes infrastructure even more than Hillary: “We have a great plan and we are going to rebuild our infrastructure … Well, I would say [it will amount to] at least double [Clinton’s $250 billion] numbers. And you’re going to really need more than that.”
He has promised to replace Obamacare with universal healthcare based on private healthcare savings accounts, Medicaid block grants, and deregulation of healthcare markets. (That might actually save the government money.) He has promised veterans the VA will pay for them to get private medical care from the provider of their choice. He says he’s going to build up our armed forces, especially our Navy, and destroy ISIS in a matter of months.
He promises to save Social Security without raising the retirement age, triple the number of Immigration and Customs Enforcement (ICE) agents, create a deportation task force, and build a wall along our entire southern border. (Of course, Mexico will pay for the wall.)
Without specifics, it is impossible to calculate the cost of Trump’s programs with any accuracy. But the National Taxpayers’ Union guesstimates it will cost around $1.1 trillion over the next 10 years.
How will they pay for their largess? Both say they will eliminate waste and make government more efficient. (Hmm … Where have I heard that before?)
Hillary says she will raise taxes on the “one-percenters”; Trump, on the other hand, claims he will cut taxes on U.S. citizens, and instead squeeze revenue from our allies and trade partners by renegotiating trade agreements and making NATO members pay their fair share of defending democracy in the world. Trump also claims that by cutting taxes and bureaucratic regulation, his policies will unleash an economic boom in the U.S. similar to the 7-8 percent growth rates China has experienced, and that will cause tax revenues to soar.
If you believe Santa has a condo in D.C., I hate to shatter your illusions, but he does not. Hillary will not be able to fill government coffers by taxing the wealthy with their highly paid accountants devoted solely to thwarting the taxman. And Trump will not unleash an economic boom by deporting low-wage workers and restricting foreign trade. If either of them makes a serious effort to fulfill their promises, we are likely to see budget deficits even larger than those in the Obama years.
Neither of them is talking about the federal budget deficit. (When you are trying to sell something, you don’t want to talk about what it costs.) The federal debt is now approaching $20 trillion dollars. About $6 trillion is owed to government trust funds (yes, the government has raided the savings in its “cookie jar” funds like Social Security); $8 trillion is owed to the U.S. public and $6 trillion is owed to foreign governments.
Borrowing from foreign countries to pay for a government we can’t afford is relatively new for the U.S., and some of the countries we borrow from, like China, which holds $1.3 trillion of our debt, are not on our best-friends-forever list. What difference does that make? Well, the federal government currently pays $380 billion a year in interest on its debt, making it the fourth largest item in the federal budget. If those countries decide they don’t want to hold our debt anymore and start selling U.S. bonds, it will cause the price of our bonds to fall and the interest rate to soar. Tax revenue pays for less than half of what the federal government spends, so if interest rates rise, we could face a crisis similar to what Greece faced last year when it had to either drastically cut government spending, raise taxes or borrow the money it needed at exorbitant interest rates.
I am not suggesting this is going to happen tomorrow, but the situation is unsustainable and untenable. Less than two months ago, the Saudi government threatened to sell $117 billion of our debt if our government declassified the 28 pages of the 9/11 report that supposedly details the Saudi royal family’s role in funding al-Qaeda and sheltering terrorists involved in the attack on the World Trade Center. That report still has not been released.
The biggest threat facing our nation is not ISIS, immigration, global warming, gun violence, LGBT rights, police/community relations or the other issues the candidates have endlessly debated. It is our skyrocketing national debt. But neither candidate wants to talk about it because it implies the need for fiscal responsibility, and, well, it is Christmas time on the Potomac.
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