Sunday, October 22, 2017

Last Call For The Age Of Austerity

As Stan Collender at Forbes does some back-of-the-napkin math on the Trump regime's budget, he comes up with the figure of one trillion dollars: the minimum yearly deficit that we'll run under the GOP's tax cut scam.  We're already looking at $940 billion gap just this year.

1. Congress appears to be ready to increase the amount it will appropriate for military and domestic programs by at least $50 billion a year above what Trump requested.

2. According to the Congressional Budget Office, Trump's executive order ending federal subsidies for the Affordable Care Act will increase the budget deficit by an average of about $19 billion a year.

3. Federal disaster assistance for Harvey, Irma and Maria will be at least $36 billion, with more expected both for additional relief for hurricane victims and for the victims of the fires in northern California. While most of this aid will be spent in fiscal 2018, disasters (hurricanes, tornadoes, wildfires, floods, earthquakes, etc.) requiring a higher-than-budgeted federal response will occur every year and their costs should be included in the permanent projected deficit.

4. If the economy doesn't grow as fast as Trump is promising, additional Pentagon spending is needed for military reasons and interest rates rise more than anticipated because of the increased federal borrowing, consecutive deficits between $1.2 trillion and $1.5 trillion are not out of the question.

In other words, a $1 trillion annual deficit should be considered the minimum of what will occur each year during the Trump presidency.

And that leads us to the optics of adding a trillion dollars a year to the national debt.  No doubt Republicans in Congress won't tolerate it, and that means a trillion or more in yearly cuts to Medicare, Medicaid, and the safety net to balance the budget.

Of course, those cuts will be "necessary to save America" as a result.

Even if the Dems can win back Congress in 2018, it's going to be a rough road to recovery, and that's before the very real possibility of another housing crash and economic mega-recession or even full-blown depression.

The forecast doesn't look good, folks.  Not at all.

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