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zorroloco 25-Jun-24, 06:28	tRump - the debt president Former President Trump ran up the national debt by about twice as much as President Biden, according to a new analysis of their fiscal track records. Why it matters: The winner of November's election faces a gloomy fiscal outlook, with rapidly rising debt levels at a time when interest rates are already high and demographic pressure on retirement programs is rising. Both candidates bear a share of the responsibility, as each added trillions to that tally while in office. But Trump's contribution was significantly higher, according to the fiscal watchdogs at the Committee for a Responsible Federal Budget, thanks to both tax cuts and spending deals struck in his four years in the White House. By the numbers: Trump added $8.4 trillion in borrowing over a ten-year window, CRFB finds in a report out this morning. Biden's figure clocks in at $4.3 trillion with seven months remaining in his term. If you exclude COVID relief spending from the tally, the numbers are $4.8 trillion for Trump and $2.2 trillion for Biden.
bobspringett 25-Jun-24, 16:19	Zorro 06:48 This question can be approached in different ways:- 1. If you assume that a deficit is a Bad Thing, then that's the end of the argument. Trump loses. 2. But remember that the 'need' to minimise the deficit is what made the Great Depression the disaster it became. It was Keynesian spending (much of it co-incidental and driven by re-armament spending rather than carefully considered) that ended the Great Depression. Since then it has become standard economic wisdom that government spending SHOULD be counter-cyclical, to maintain a proper level of overall demand in the economy and thereby ensure a proper level of employment. Therefore a government should run deficits when unemployment is high. This is always popular with the voters! The converse is that governments should increase taxation when the economy is running well, or demand-pull inflation takes over, which then leads to demands for higher pay and a spiral of cost-push with demand-pull accelerating. This is the part that governments invariably get wrong; they know that tax increases, specially when the budget is already in surplus, doesn't win many votes. Also, remember that a growing economy needs more money if it is to operate smoothly. If Americ had run perfectly balanced budgets since 1800, the nation would be an agrarian backwater. Deficits, financed by printing money in a fiat economy, is how the money supply can be increased to allow commerce and industry to grow fast enough to employ the growing workforce. The problem with Trump's tax cuts is NOT that they increased the deficit and nothing more. The problem is that they set America up for a burst of inflation because this deficit increased demand without increasing supply. This didn't happen straight away, because COVID put a lot of people out of work and counteracted the increased demand. But once people got their jobs back, that demand exploded into an environment of reduced supply. That's why the immediate post-COVID period saw inflation jump; it was Trump's combination of tax cuts and increased spending that caused it. COVID did not more than delay the outcome. The BEST POSSIBLE long-term goal for a Federal Budget is for deficits over time to match the increase in GDP. If GDP over ten years grows at (say) 2% compounded, then a long-term average deficit of 2% of GDP provides the money supply for a smooth economy. But within that long-term average, the annual deficit should be moderately counter-cyclical.

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