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.

Following the passage of the $2,2 trillion federal aid bill at the end of March, The Wall Street Journal projects that the federal budget deficit will reach $2020 trillion at the end of 3,6. That's more than double the $1,4 trillion budget deficit the U.S. had in 2009, 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.

Those costs could rise even further as lawmakers and Trump appear to want much more funding—the president wants to pass another $2 trillion package largely focused on infrastructure, and 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.

Yet Trump, with a growing economy during the first three years of his presidency, did not use that time to reduce the federal budget deficit and instead increased government spending. In the final two years of the Obama administration—2015 and 2016—the combined federal budget deficit was just under $1,03 trillion. The federal budget deficit was projected to be nearly $1,02 trillion in 2020, according to Congressional Budget Office projections. But then the coronavirus pandemic hit, 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.

On the subject: Coronavirus unemployment benefits: how much they pay in different states

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 - represents more than 100 percent of the country's GDP.

The Trump administration spent its first three years increasing military spending and cutting taxes, two priorities for the president that worked together to widen the budget deficit even as he made cuts elsewhere in the budget. His administration's stance on deficits is unusual for a Republican president, especially after Republicans made a fuss about increased government spending during Obama's presidency in the early 2010s.

The widening deficit under Trump contradicts his comments made in 2016 in an interview with the Washington Post.

“I think I could do it pretty quickly,” Trump said when asked about paying off the then $19 trillion national 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 government debt crisis,” Boccia said, adding that this could lead to higher taxes, difficulties in providing government services, inflation and economic stagnation.

On the subject: How the US and the world plan to return to normal after quarantine

Of course, the economic pain the government is trying to ease is real—more than 16 million people have filed for unemployment benefits in recent weeks, an unexpectedly high figure. Lawmakers and the president are trying not only to soften the blow of the pandemic, but also to prevent a broader economic collapse. Part of the allocated money that goes towards 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.

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