Americans already experienced the harmful effects of Donald Trump’s trade war and tax cuts for the ultra-rich during his first term in office. Still, Trump plans to go even further in a second term with extreme economic policy that experts say will explode the national debt by more than $7 trillion.
The new study done by CRFB contradicts Trump’s false claims that any debts will be offset by issuing huge tariffs on American trade partners. However, it does highlight Trump’s failure to deliver on his economic promises during his first term, and provides insight that casts doubt on the lofty promises he’s made for a second term.
Trump’s political record is full of failed promises to bring down the national debt. While running for president in 2016, Trump promised he could get rid of the national debt in eight years (he did not). Similar to his current rhetoric on waging huge tariffs on American trade partners, Trump claimed that once his 2017 corporate tax cuts took effect they would “start paying off that debt like water.”
Despite Trump’s lies about being on pace to eliminate the debt in his first term, the CRFB analysis mirrors Trump’s first-term economic performance, which increased the national debt by more than $7 trillion. During his four years in office, Trump oversaw the largest annual deficit in American history. Trump also oversaw the third-largest increase of percentage growth debt for any administration at nearly 5% by the end of his first term – far exceeding projections of 2% when he took office.
Learn more about what experts are saying about Trump’s economy-wrecking proposals to explode the national debt:
- Former president Donald Trump’s campaign proposals would add more than twice as much to the national debt as Vice President Kamala Harris’s would, according to new research released Monday.
- Trump has called for extending his 2017 tax cuts, which would add more than $5 trillion over 10 years to the United States’ $35.7 trillion national debt, according to a study from the nonpartisan Committee for a Responsible Federal Budget (CRFB). His plan to end taxes on overtime wages, Social Security benefits and tips would add another $3.6 trillion in debt. And his call for a nationwide campaign to detain and deport undocumented immigrants would cost $350 billion.
- Trump says major new tariffs on imports would bring in enough revenue to offset all the tax cuts, but the study doesn’t support that claim, and many economists say the tariffs would also drive prices up for U.S. consumers.
- All told, CRFB found that the Trump policies it studied would add $7.5 trillion of debt.
- The tariffs Trump has proposed would reach as high as 20 percent on all $3 trillion of annual imports, which could bring in $2.7 trillion in revenue, according to CRFB.
- But, by some of his own economic advisers’ analysis, the tariffs could also dramatically increase prices and depress U.S. economic output, because producers often pass on the cost of import duties to consumers. Lower economic output might also mean lower tax revenue.
- “Tariffs are just a tax, no question about it,” Stephen Moore, an economist at the right-wing Heritage Foundation and a Trump economic adviser, told policymakers at an event hosted by Politico this spring. “I don’t always agree on everything with Donald Trump. He knows I don’t agree with the monetary policy. A tariff is just a consumption tax.”
Published: Oct 7, 2024 | Last Modified: Oct 20, 2024