If there is one thing the previous president, Donald Trump prided himself on, it was his claim to his familiarity with debt. He said, ‘I’m the king of debt. I am excellent with debt. No one grasps debt better than me.’ This assertion was corroborated by the Committee for Responsible Federal Budget (CRFB), an impartial non-profit, in their recent report. They projected that according to Trump’s economic blueprint, the US would be steeped an alarming $7.5 trillion deeper into debt within the next decade. In stark contrast, they estimated that Vice President Kamala Harris’ approach would have contributed only $3.5 trillion.
The unbounded financial ambitions of both the Republican and Democratic contenders were highlighted by the CRFB. They noted, with grave concern, that at the best, these campaign promises would allow the current financial situation to stagnate. At the worst, they could compellingly increase values of our debt and deficits. It is rather alarming to see promises that could lead to such precarious outcomes from those in high positions of power.
Furthermore, both parties have shown a remarkable lack of transparency in revealing specifics about their economic plans. This absence of clear information brings about considerable uncertainty in estimating the actual debt implications. However, taking different factors into account, the CRFB reported that Harris could potentially thrust us between zero and a startling $8.1 trillion further into debt. Meanwhile, Trump’s plans could mean an increase between $1.5 trillion and a colossal $15.2 trillion.
Melding his self-declared mastery in debt, Trump also claimed, ‘I think nobody knows more about taxes than I do, maybe in the history of the world.’ He paraded promises of tax cut after tax cut, while on his campaign trail. Tax reductions on wage surpluses such as tips, overtime pay, and even Social Security were entailed in his lofty campaign pledges.
Looming large in Trump’s fiscal plan was the extension of the Tax Cuts & Jobs Act (TCJA). Initiated back in 2017 under Trump’s aegis, the durability of these cuts is now in question as they are set to expire by the end of this year. The CRFB report projected that maintaining these tax cuts would cost America a whopping $5.4 trillion.
In considerable contrast, Vice President Harris has pledged to prolong the tax relief from the TCJA for Americans earning under the bracket of $400,000 annually. This plan, though far from frugal, carries a lesser burden, standing at around $3 trillion.
To mitigate the astronomical expense of his plans, Trump offered two alleged solutions. The first involved instituting tariffs on imports, and the second proposed granting drilling permissions to oil corporations on protected lands. Both of these measures collectively were predicted to fetch $3.7 trillion of government revenue over a span of a decade.
However, Vice President Harris’ plan is estimated to bring in $4.3 trillion, according to CRFB. By imposing increased taxes on corporations and those who earn above $400,000 per annum, Harris would generate nearly half a trillion more in revenue than Trump’s proposed strategy.
Similar to these approaches, projected deficits over the next decade are also sizeable. Both Harris and Trump’s plans would invariably add to the anticipated $22 trillion in budget deficits facing America in the next decade. Congressional apathy could further exacerbate this condition.
Earlier this year, the CRFB reported that the U.S.’s publicly held debt cartwheeled over an immense $35 trillion. Interestingly, the CRFB had also released another report in June which presents an intriguing twist to the narrative.
Contrary to his boasts of fiscal understanding, this report reveals that Trump had, in fact, inflated the national debt to unprecedented levels during his term. This increase was precisely twice as much as that under President Joe Biden’s tenure. So much for understanding debt, it seems.
Trump’s infamous statement, ‘I understand money better than anybody,’ is, thus, quite ironic. Contrasting his claims with the on-ground implications of his policy decisions, a vast chasm becomes evident. His self-pronounced command over debt and taxes seems to fade into unsubstantiated bravado when held up against the CRFB’s projections.
In retrospect, it is worth questioning whether optimistic assurances without a detailed action plan truly reflect fiscal competence. Both officials, in spite of their differing allegiances, need to be held accountable for their promises and actions. After all, these are the decisions that would determine the economic stability of the nation and its citizens.