Recently, the Congressional Budget Office (CBO) released a report stating the national debt will increase by an additional $1.9 trillion over the next 10 years due to Trump’s tax cuts. Unfortunately, while the growing national debt has led to hand-wringing from Republicans and Democrats, a logic-defying narrative has emerged on what is to blame. Therefore, it needs to be made clear: No, the Trump tax cuts are not blowing up the debt.
It should first be stated that the CBO’s numbers ought to be taken with a grain of salt, because the CBO is almost always wrong — quite often, spectacularly so. For my money, the economic growth projections in the CBO report skew pessimistic for what is achievable, but for argument’s sake, we will use the CBO’s numbers to find the real culprit behind our growing national debt.
The CBO claims the tax cuts will cause the debt to increase by an additional $1.9 trillion over 10 years (this is their “cost” of the plan). Put another way, this amounts to a deficit increase of (roughly) $200 billion per year. $200 billion is certainly a big number, but much less so in the context of our current $4 trillion annual budget.
But that’s not all — the CBO also projects our spending will grow exponentially, each year, for the next ten years. By 2028, the CBO projects our federal budget will exceed $7 trillion dollars. Again, for argument’s sake, let’s pretend that the Trump tax cuts will lead to a $200 billion annual deficit increase. That figure barely puts a dent in the $7 trillion budget for the year 2028. And again, greater economic growth could diminish that deficit significantly further.
And how about this: Between 2019 and 2028, the CBO anticipates that federal spending will exceed $56.5 trillion dollars. Still think that $200 billion per year from “tax cuts” is nuking our budget?
To claim that the Trump tax cuts are responsible for blowing up the national debt is simply absurd. If anything, the CBO’s report illustrates that the tax cuts, as positive as they are, amount to a mere drop in the bucket in terms of total federal spending.
So what is blowing up our national debt? Freedom Partners’ Nathan Nascimento summed it up perfectly:
The root cause of our nation’s growing deficit problem is the reckless spending in Washington, not the much-needed relief for American taxpayers. In continuing to vote for massive increases to government spending, like last month’s $1.3 trillion omnibus, and in failing to moderate the immense growth of our entitlement programs, lawmakers from both parties are responsible for these out-of-control deficits.
There you have it. The government’s spending addiction (and, I would add, the historically below-average economic growth post-2000) is to blame for our growing national debt. Don’t buy the erroneous claims that Trump’s tax cuts are responsible.
Author’s note: Pat Hall also contributed to this article.
Photo credit: Gage Skidmore