Donald Trump vowed during his presidential campaign that he would eliminate the nation’s $19.9 trillion debt in eight years. But the country’s annual deficit just jumped 41.8 percent in the first quarter of this fiscal year over the same period the previous year. And total debt is now the highest it has ever been in U.S. history, according to Treasury Department figures.
The nation’s debt — the accumulation of annual deficits — has now ticked up to $22.06 trillion, more than $2 trillion higher than when Trump took office.
Skyrocketing debt can create a crisis for a nation as more of its GDP is devoured by interest costs.
The budget deficit from October through December — the first quarter of the current fiscal year — totaled $318.9 billion, up from a deficit of $225 billion for the same quarter the previous year.
The deficit was fueled by the $1.5 trillion tax cut that Trump pushed through Congress in December 2017 — which slashed corporate taxes from 35 percent to 21 percent and took effect in January 2018.
Trump insisted the cuts would pay for themselves as the corporate tax windfalls would stimulate business expansion that would refill the tax coffers. But a national business survey released last month concluded that cuts had no significant impact on business investment and hiring.
“A large majority of respondents — 84 percent — indicate that one year after its passage, the corporate tax reform has not caused their firms to change hiring or investment plans,” said the president of the National Association of Business Economics.
Trump vowed just months before his election that he would eliminate the entire national debt in two terms as president — a claim economists found outlandish. The key, Trump said, would be to renegotiate trade deals — the “big trade deals that we’re doing so badly on,” including those with China, he told The Washington Post at the time. Trump has yet to reach a deal with China, and his tariffs on Chinese goods have triggered a trade war.
So far this fiscal year, tax revenue is up a mere 0.2 percent, while spending is up 9.6 percent, according to the Treasury Department.
The Congressional Budget Office is projecting that this year’s deficit will jump to $897 billion, up a total of 15.1 percent over last year’s deficit of $779 billion — the largest since 2012. The annual deficits are expected to top $1 trillion beginning in 2022, according to the CBO.
The Daily Beast, citing unnamed sources, reported late last year that Trump pays little attention to aides who sound the alarm about increasing debt, reportedly saying “I won’t be here” when things blow up. Trump’s businesses have declared bankruptcy six times, reports The Washington Post.
The nation’s debt nearly doubled during the Obama administration as the U.S. struggled to emerge from a recession triggered by the subprime mortgage debacle. But debt racked up in hard times is supposed to be addressed during a strong economy like the one Trump inherited.