In his State of the Union address earlier this month, President Trump celebrated the putative success of the economy he claims to have built, doing so in historic terms: “I am thrilled to report to you tonight that our economy is the best it has ever been,” he boasted.
And yet, at the same time, budget deficits and the national debt continue to surge, revealing that Trump’s policies are not designed to fuel an economy for the long haul but rather that currently the U.S. economy is running on a sugar high, showing the potential to crash at any moment.
While the stock market is performing at record levels, the national debt has also surged to record levels, surpassing $23 trillion for the first time in history and promising only to bloat more. Over the first four months of 2020 fiscal year, the deficit is outpacing last’s year deficit expansion by 25% in the same time frame. Over the past 12 months, the deficit has expanded $1.1 trillion.
Bess Levin, writing for Vanity Fair, gives perspective to the horror of Trump’s sugar-high economy when she writes, “Incredibly, this is all happening against the backdrop of the longest economic expansion on record and the lowest jobless rate in 50 years, conditions that typically cause the budget deficit to shrink.”
Trump promised, of course, that the enormously generous tax cuts he bestowed on corporate America and the wealthiest Americans would spur a growth that would cover the cost of tax cuts and more, spreading prosperity to all Americans. (Of course, let’s not forget he campaigned on the promise he would, in fact, eliminate the debt entirely, which at the time stood at approximately $19 trillion.)
Yet while the GDP grew 2.9% in 2018, growth slowed to 2.3% in 2019 as the debt and deficit swelled to historic proportions.
Days after Trump’s State of the Union peacocking, Vice President Mike Pence defended Trump’s deficit expansion in an interview with CNBC.
Here are a few of his responses which not only recycle the stale—because failed—narratives of trickle-down economics and of tax cuts paying for themselves, but also grossly distort history, falsely claimly Trump inherited an economy in decay, as opposed to one of the most steadily expanding economies in history the Obama administration engineered. Pence prevaricated as follows:
“The president came into office and he said, ‘First and foremost, we have to restore growth.’”
“Deficits and debt are right in line, but it is first about getting this economy moving again and we really do believe the trajectory of this economy.”
“Once we get this economy rolling, we’re going to work real hard, not just to get President Donald Trump four more years in the White House, but we’re going to make sure we have a Republican Senate and a Republican House to keep America growing and to deal with those long-term fiscal challenges.”
The big lie here, of course, is Pence’s insistence that Obama did not have the economy rolling, that Trump needed to get it moving again.
Politifact reported, for example, having looked at the economic measures Trump invokes, that “the trend lines continued almost seamlessly from the second half of Obama’s presidency into the first three years of Trump’s tenure. Trump’s claim that he turned around a failing economy is wrong.”
Obama ran deficits and increased the debt doing the arduous work of pulling the nation’s economy out of a deep recession. Trump has been over-stimulating an economy that was already healthy, throwing money at the wealthiest while failing to invest in real growth for America, deceiving Americans it will trickle down.
Of course, the World Bank rejected the efficacy of trickle-down economics back in 2015, debunking it as a myth. The International Monetary Fund actually lambasted it as a joke.
Pence’s insistence on recycling this failed myth is basically an admission of Trump’s fraudulent mismanagement of the U.S. economy to the detriment of American lives.
Pence asserted that Trump sees “the real long-term solution to the fiscal challenges in Washington, D.C., is making sure the budget of every American is growing.”
And let’s not forget how growing deficits impact Americans’ economic well-being.
The ballooning deficit resulting from the Trump tax-cuts, for example, cultivated a fertile context for Paul Ryan and Mitch McConnell to loudly renew their insistence that cuts to Medicare and Social Security are necessary to address the out-of-control deficit their own policies immediately exacerbated. Far from benefiting Americans, these tax cuts, which were supposedly to trickle down, just keep cutting Americans and increasing economic precarity, not prosperity.
Trump himself recently confirmed while attending the World Economic Forum in Davos, Switzerland that he intended to cut Social Security, Medicare, and Medicaid.
And while we need to support farmers for our national and individual well-being, the reason taxpayers are contributing $28 billion to bail them out is precisely because of Trump’s failing trade war with China and the tariffs he has levied.
Again, this is $28 billion dollars effectively taken out of Americans’ pockets for which they receive nothing in the return. In fact, they will lose more, as these payouts lead to cuts elsewhere as well as rising deficits.
And keep in mind that, as economist Larry Summers has pointed out, the real investments that would spur economic growth would be to re-build and update the nation’s infrastructure.
But this infrastructure is largely public domain. Corporations won’t rebuild our bridges and roads, update our power grids, lay new rail for faster trains. etc. They expect the government to do that with taxpayer money.
But, oops, corporations just aren’t expected to pay a fair share in taxes; and our tax money is being thrown at them while they engage in massive layoffs, doing little in return to invest in American lives.
Pence knows this, of course. He is admitting the failure of Trump’s economy.
Tim Libretti is a professor of U.S. literature and culture at a state university in Chicago. A long-time progressive voice, he has published many academic and journalistic articles on culture, class, race, gender, and politics, for which he has received awards from the Working Class Studies Association, the International Labor Communications Association, the National Federation of Press Women, and the Illinois Woman’s Press Association.