Breakingviews: Trump to follow Obama's debt record

Published Thu, Sep 22 20163:58 PM EDT

Breakingviews

Gina Chon

Donald Trump is ready to follow in President Barack Obama 's footsteps in a big way. The Republican presidential nominee's revised economic plan would add $5 trillion to the national debt, a new study estimates. Obama tallied more than $8 trillion during his eight years in office. Just before he took residence in the White House in 2009, U.S. debt held by the public through Treasury securities and such stood at $5.8 trillion, according to the Congressional Budget Office. The financial crisis prompted a big increase in government spending to help stimulate the flagging economy. By 2010, the level of borrowing had reached $9 trillion. More from Breakingviews : Fed "forward guidance" blows too much smoke The higher outlays made sense given the dire state of affairs. Recovery may have been slow, but the unemployment rate has halved and the U.S. Census Bureau just reported that median household income posted its first increase since 2007. Government expenditures eventually normalized and the country's debt load now stands at about $14 trillion. Trump's latest plan would add $5.3 trillion to that sum over a decade, the non-partisan Committee for a Responsible Federal Budget said on Thursday. Even though the New York real estate developer has restrained his tax plan so that the highest personal income tax bracket rate would be 33 percent instead of the originally proposed 25 percent, it would still cost Uncle Sam some $5.8 trillion in revenue, according to the report. The Republican candidate says his plan would be deficit-neutral and create 25 million jobs over 10 years. That assumes U.S. growth of 4 percent, beyond what most economists consider realistic. It also puts misguided faith in debunked trickle-down theories that tax cuts spur investment and help average workers. Fiscal prudence is no longer a priority for most elected lawmakers, although Hillary Clinton 's economic plan only would grow the national debt by about $200 billion in a decade, the budget group estimates. With interest rates so low, some borrowing, as for infrastructure projects, can be more easily justified than others. All of it keeps kicking a big can down the road, though For more independent commentary and analysis from Reuters Breakingviews, visit breakingviews.com

Donald Trump

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