By Robert A. Vella
One of the most popular memes in American politics portrays Democrats as frivolous spenders of taxpayer money and Republicans as judicious administrators of the federal budget. The meme puts forth the label ‘fiscal conservative’ which Republicans proudly wear. On the campaign trail, they constantly argue for reducing the national debt by limiting borrowing and enforcing the concept of balanced budgets. Republicans frequently equate the federal government to individual family budgets which everyone knows can be ruinous when spending gets out of control. However, when Republicans are in power – like now – their actions contradict their rhetoric most hypocritically.
For example, deficit spending ballooned under Reagan to pay for his massive expansion of the U.S. military and to help stimulate western economies which had stagnated from the oil shocks of the 1970s. And, remember those budget surpluses achieved in the 1990s under Democrat Clinton? “W” wiped those out quick with his tax cuts for the rich and his costly wars in Afghanistan and Iraq. Now, President Trumpsky is doing the same (note that the spending spike in 2009 under Obama resulted from his successful move to keep the Bush-caused Great Recession from descending into a calamitous economic depression):
Here are the exact figures: The U.S. Treasury expects to borrow $955 billion this fiscal year, according to a documents released Wednesday. It’s the highest amount of borrowing in six years, and a big jump from the $519 billion the federal government borrowed last year.
Treasury mainly attributed the increase to the “fiscal outlook.” The Congressional Budget Office was more blunt. In a report this week, the CBO said tax receipts are going to be lower because of the new tax law.
What’s particularly jarring is this is the first time borrowing has jumped this much (as a share of GDP) in a non-recession time since Ronald Reagan was president, says Ernie Tedeschi, a former senior adviser to the U.S. Treasury who is now head of fiscal analysis at Evercore ISI. Under Reagan, borrowing spiked because of a buildup in the military, something Trump is advocating again.