Government Trump spending may break records for all previous presidents
U.S. President Donald Trump and Congress Endorse Unprecedented Government Spending on Coronavirus According to forecasts, the amount could reach a record $ 5 trillion of annual budget deficits, writes Fox News. Even considering inflation, not a single modern administration from Roosevelt to Obama has seen such levels of spending and budget deficits.
US public debt already exceeds $ 24 trillion. At the moment, the situation looks like the US budget deficit following the results of 2020 will break the historical record for the annual deficit previously established under the 44th US President Barack Obama. This is due to the fact that the US government solves the problem of the consequences of the coronavirus pandemic by paying historically large bills in the form of federal assistance to citizens, trying to mitigate the effects of self-isolation on business and public life in general.
The Wall Street Journal predicts that the federal budget deficit will reach $ 2,2 trillion by the end of March following the passage of the $ 2020 trillion federal aid bill in late March. That's more than double the $ 3,6 trillion budget deficit the U.S. had in 1,4 - the highest annual federal budget deficit in U.S. history.
In part, this was inevitable for President Trump. Revenues will decline as the economy declines, and total costs associated with the coronavirus are rising.
That spending could increase even more as lawmakers and Trump appear to want much more funding - the president wants to pass another $ 2 trillion package, mostly focused on infrastructure, and the Democrats are pushing a separate $ 500 billion measure to help small businesses. hospitals and local authorities.
In general, the total budget deficit could be about $ 5 trillion, if such measures are approved.
And yet Trump, with a growing economy during the first three years of his presidency, did not use this time to cut the federal budget deficit, but instead increased government spending. In the last two years of the Obama administration - 2015 and 2016 - the combined federal budget deficit was just under $ 1,03 trillion. According to forecasts by the Congressional Budget Office, the federal budget deficit was supposed to be almost $ 1,02 trillion in 2020. But then the coronavirus pandemic began and everything changed.
Since changes such as inflation, fluctuations in the economy, and population growth make it difficult to compare government spending, public debt, and budget deficits over specific periods of time, the state of public debt or deficits is usually calculated as the share of gross domestic product (GDP), which shows the real relationship between the economy and debt and, accordingly, the country's ability to pay off this debt.
The federal budget deficit as a percentage of GDP in 2020 is likely to be the highest since World War II - the $ 3,6 trillion deficit is roughly 15 percent of U.S. GDP.
A $ 50 billion federal deficit amounted to almost 27 percent of GDP in 1943, when the United States was in the middle of World War II under President Franklin Delano Roosevelt. In second place in US history, a budget deficit of 9,7 percent of GDP in 2009, when the Obama administration tried to pull the country out of the Great Recession. The highest budget deficit between these periods was in 1983, when the Reagan administration lowered taxes and increased military spending in an attempt to defeat the Soviet Union in the arms race, which resulted in a deficit of 5,7 percent of the country's GDP.
The budget deficit under Lyndon Johnson, who launched Medicare and Medicaid, never exceeded 3 percent of GDP, mainly because administration expenses were not the result of a crisis, such as World War II or the Great Recession, and the high cost of these programs was spread over many years.
The current US national debt - more than $ 24 trillion - is more than 100 percent of the country's GDP.
The Trump administration ramped up military spending and cut taxes in its first three years, two priorities for the president, who worked together to widen the budget deficit, even though the head of state made budget cuts elsewhere. Deficit attitudes during his administration are not typical for a Republican president, especially after Republicans in the early 2010s raised a fuss over the increase in government spending during the Obama presidency.
The widening deficit under Trump contradicts his comments made in 2016 in an interview with the Washington Post.
“I think I could have done it pretty quickly,” Trump said in response to a reporter's question about repaying the then $ 19 trillion public debt.
When a newspaper correspondent asked Trump how long it would take, Trump replied: “Well, I would say for eight years,” before explaining that, in his opinion, a revision of the terms of US trade deals could help eliminate the country's national debt.
Romina Boccia, president of the Heritage Foundation’s Federal Budget Center, warned that the fast spending of government efforts to break out of the economic hole caused by the coronavirus could have even worse consequences for the United States.
“There is, of course, a real risk that at the other end of this crisis we could fuel a sovereign debt crisis,” Boccia said, adding that this could lead to tax hikes, difficulties in public service delivery, inflation and economic stagnation.
Of course, the economic pain that the government is trying to alleviate is real - more than 16 million people have applied for unemployment benefits in recent weeks, an unexpectedly high number. Lawmakers and the president are trying not only to cushion the blow from the effects of the pandemic, but also to prevent a wider economic collapse. Part of the allocated money, which goes to business loans, must be returned.
Boccia called on lawmakers to more specifically target assistance programs for businesses and individuals who have actually lost money due to problems associated with coronavirus, and to rewrite the project to expand unemployment benefits, which some lawmakers condemned because the proposed project could make it leave current jobs for some workers more profitable than continuing work.
Read also on ForumDaily:
stdClass Object ([term_id] => 12 [name] => In the US [taxonomy] => category [slug] => novosti-ssha)In the U.S.
stdClass Object ([term_id] => 3350 [name] => US economy [taxonomy] => post_tag [slug] => ekonomika-ssha)U.S. economy
stdClass Object ([term_id] => 28340 [name] => coronavirus [taxonomy] => post_tag [slug] => koronavirus)coronavirus
stdClass Object ([term_id] => 28347 [name] => Special projects [taxonomy] => category [slug] => specproekty)Special Projects
stdClass Object ([term_id] => 28353 [name] => READ ABOUT CORONAVIRUS [taxonomy] => special [slug] => kitajskij-koronavirus)
stdClass Object ([term_id] => 28455 [name] => COVID-19 [taxonomy] => post_tag [slug] => covid-19)COVID-19:
Do you want more important and interesting news about life in the USA and immigration to America? Subscribe to our page in Facebook. Choose the "Display Priority" option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram - there are many interesting things. And join thousands of readers ForumDaily Woman и ForumDaily New York - there you will find a lot of interesting and positive information.