Why Trump and Harris Aren’t Talking About the $1.8 Trillion Deficit
Oct 10, 2024
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The U.S. budget deficit has reached a staggering $1.8 trillion, yet presidential candidates seem to avoid addressing it. The discussion highlights the political challenges of a looming $18 trillion deficit, often overshadowed by more immediate issues. Experts explore the historical context of national deficits and current spending trends. Both candidates propose plans likely to futher increase the deficit without offering solid strategies for management. This raises crucial questions about the future of America's fiscal policies amid ongoing economic strains.
The U.S. budget deficit has reached $1.8 trillion, driven by expansive economic proposals from presidential candidates that prioritize immediate benefits over fiscal sustainability.
Both Trump and Harris plan to further increase the budget deficit through tax cuts and expanded social benefits, raising serious concerns about future economic stability.
Deep dives
Promises and Budget Deficit
Presidential candidates Kamala Harris and Donald Trump are making significant promises to voters, including tax cuts, increased military spending, and expanded social benefits. However, these plans contribute to an existing budget deficit that currently stands at $1.8 trillion, meaning the U.S. is spending much more than it is earning. This growing deficit often takes a backseat in political discussions, overshadowed by more immediate concerns such as tax reduction and social programs. The lack of focus on the budget deficit raises questions about long-term fiscal health and the potential consequences of these expansive proposals.
Understanding the Budget Deficit
The budget deficit is defined as the difference between the government's revenue and its spending, which can be illustrated through an analogy of a popcorn bowl where collected taxes represent the popcorn and government spending uses it up. As government programs like Social Security, Medicare, and military expenses consume the budget, borrowing becomes necessary to fulfill spending demands that exceed revenue. Last year, the U.S. borrowed $1.8 trillion, a figure comparable to the entire GDP of Brazil. The continuous accumulation of deficits not only exacerbates national debt but also raises concerns about future implications, such as increased interest rates and diminished trust in the U.S. dollar.
Looks Ahead: Candidates' Plans and Economic Impact
Both Trump and Harris propose economic policies that would likely deepen the deficit, with Trump advocating for tax cuts and increased spending on defense and immigration while relying on tariffs as a revenue source. Conversely, Harris suggests extending existing tax cuts and introducing new benefits like an expanded child tax credit and relief for student debt. Estimates show that Trump's policies could increase deficits by $7.5 trillion over the next decade, while Harris's plans may add about $3.5 trillion. Without a concrete strategy to address these deficits, the sustainability of government programs and services becomes increasingly precarious, highlighting the tension between electoral promises and fiscal responsibility.
The U.S. budget deficit topped $1.8 trillion in the last fiscal year. Meanwhile, both candidates for president are proposing plans that would increase the deficit for years to come. WSJ’s Richard Rubin explains how the deficit got so large and why the candidates don’t talk about it.