It’s well known that the President-elect is a man of expensive tastes. However, despite his penchant for gold trimmings and high-rise buildings, the construction billionaire was able to hit a nerve with US voters in 2016. Love him or hate him, in many ways, big spender Trump appears to be keeping his promises.
Unemployment is at a 50-year low. Business is booming. And America is on its way to indeed becoming great again. There’s just one small problem: the land of the free is saddled with a whopping $779 billion deficit after Trump’s first full fiscal year. And no, that wasn’t among the pledges bleated out on the electoral podiums.
Deficit Reaches $779 Billion After Big Spender Trump’s First Fiscal Year
According to OMB data, after hefty tax cuts and increased spending, the US deficit grew by $113 billion over the last twelve months. To be fair, plunging the country into debt is something US presidents are generally pretty adept at. The problem has been gradually getting worse since the financial crisis a decade ago.
Although, like everything else, big spender Trump is doing it bigger and better, widening the budget deficit to reach a six-year high of $779 billion after his first fiscal year in the White House. If racking up debt is nothing new, racking up debt during an economic boom is, with the gap widening by some $113 billion since the year before to reach 3.9% of GDP.
A report released by the US Treasury and Office of Management and Budget put this figure at a 40-year high, up by 3.2% from the year before. While not entirely unexpected, these figures will confirm what most people already knew and what Ron Paul repeatedly refers to as the government kicking the debt further down the road.
If Debt Goes Up in Times of Plenty What Happens in Times of Crisis?
The biggest concern is that the government is growing the country’s deficit during a time of economic boom with unemployment at its lowest since the 1960s. Tax cuts passed at the end of 2017 and higher public spending on programs such as Medicare are adding to the burden. And making people wonder: if we need to borrow money when the economy is doing well–what happens during a downturn?
The Congressional Budget Office predicted that if spending continues along this path, America will hit its highest debt levels relative to GDP in history over the next 30 years. Yet, one of Tump’s electoral promises was that he would repay all debt within eight years.
How the US president aims to tackle the rising deficit remains to be seen, but it looks unlikely that America will no longer owe its creditors in 2025.
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