Thursday, March 02, 2017

 

PMT: The Trump Wish List-- What can we afford?


In his speech to a joint session of Congress on Tuesday, President Trump suggested a lot of things, some of which I agree with (and others I don't). However, I know we can't afford it all, or even much of it, without serious cuts elsewhere.

One thing I don't understand is this: If Trump is really an isolationist (a position I agree with, especially in military operations), why does he want to jack up military spending?

But, he does. And he wants to spend a trillion dollars on infrastructure, and not change social security and Medicare, and spend more on a border wall. Oh, and cut taxes. It just doesn't work without creating a huge(r) deficit.  [For those of you who are inclined to say "When did you worry about deficits under Obama?" I did, several times, on this blog]

Anyways, if you want to see how hard it is to make the federal budget work, check out this slightly-out-of-date "budget simulator." It is kind of fun and terrifying all at the same time. 

In short, if Donald Trump wants do anything that costs a lot of money in a fiscally responsible way, he will also have to do one or more of the following:

-- cut defense spending significantly
-- cut Social Security and Medicare payouts
-- raise taxes

That's really pretty much all of the options. Cutting the EPA or the State Department's budget does very little relative to the need new projects will generate.

So what will happen? 



Comments:
You assume that someone in the Trump administration understands arithmetic.

Keep in mind that Trump is probably the champion bankrupt in the number of such events to which his business empire has been a party. So why should the U.S. be any different!

 
So I went to a town hall meeting last Saturday with our House Rep and one chart he shared was very interesting. The majority of our annual spending comes in the form of Social Security, Medicare and Medicaid. Then financing the debt. Congress when considering the budget is not allowed to touch these two areas. They are left with a small slice called discretionary spending. Financing the military is part of this slice.

That said with the discussed (I won't say proposed) tax cuts there is very little wiggle room in this slice to pay for any of his big ticket items such as THE WALL or increasing military spending without hurting programs that benefit the many people who voted for him. They placed their bets on him and we are all going to lose bigly (or is it big league).

I guess I need to see more on the tax side from the White House, The Treasury Dept. and Congress to understand how cutting taxes on the rich and cutting corporate taxes are really going to help fund our nation. When I see a stream of US companies moving their polluting factories back to the US from China with our EPAs new relaxed air and water pollution standards maybe I will believe it.
 
To better understand the Republicon approach to approving, providing and paying for services and investments, I think of those who are planning a ski trip.

You want to trust the place you will be going. You want them to consider your safety first before their short term best interests. When you are locked into the chairlift you want more than an assurance that you will be taken safely up the hill so fast.. so so quickly.

You hope that who planned the mechanisms and installed the cable took everything possible into consideration. You want to be confident that the lift was done to code with a safety factor enforced by the authorities. You want it to be built by folks who know the consequences for not planning and paying for what is necessary to successfully get everyone to the top safely, not just those near the top.

The Republicon budget is based on tremendous growth coming from their eliminating regulations and giving large tax breaks to corporate profits and those at the top.

They want to this one more time, knowing the results of their past gambles.

This budget plan is doomed because we hopefully just know better and we have put in place tough hurdles to limit the damage like debt limits.

The Republicons have already in one month raised the debt significantly because they failed to be on watch. We also have very little cash on hand to run the country for length of time much less adding any new programs without raising the debt limit.

The scariest part is they are doing away with all oversight and safety nets.

I would bring some friends who wait and catch you when you ride the Republicon ski lift
They will be built free of business strangling regulations.


 
I'm scared of open heights and avoid ski lifts, and John Osler has given me another reason not to ride them!

Regarding the three possible ways Trump could pay for his big-ticket items: I'd say raising taxes is the least likely. As for the other two, he would do whatever Steve Bannon dreams up, if it gets to the point where the wall or the infrastructure projects go forward. (But those projects, or cutting taxes, would need Congressional approval, right? which means they'd need a funding source?)

I don't trust Trump/Bannon not to try to meddle with the entitlement programs.

 
He needs a tweet insult jar. Every time he attacks anyone on Twitter or anywhere, he puts a quarter in the jar. Bam. $90 trillion dollars in 6 months
 
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