The Trump administration just delivered a massive budget to Congress. A look at the numbers and the talking points drafted to defend it confirms that budgets favor politics over policy. This also confirms that it really doesn’t really matter who is in the White House. Big spenders will spend and then dissemble to cover up their fiscal irresponsibility.
The fiscal year 2020 budget proposes spending $4.7 trillion. That’s up from $4.5 trillion last year and $4.1 trillion in FY 2018. Meanwhile, assuming that the tax cuts set to expire in 2025 do not expire, tax revenue will grow to $3.6 trillion in FY 2020, up from $3.4 trillion last year and $3.3 trillion in FY 2018. Spending between FY 2020 and FY 2029 will grow by 40 percent, and thanks to projected GDP growth averaging 3 percent over the next decade, revenue may grow by 72 percent during that time.
Despite a growing economy, relative peace in the world and no recent national emergencies, the annual deficit will reach $1.1 trillion in FY 2020. Also, $2 trillion have been added to the debt during the last two years. While the deficit is projected to be cut in half over the next decade and the debt may stabilize, as we shall see, these numbers carry little credibility.
The prediction of 72 percent growth in revenue is propped up by very unrealistic economic growth rates and should put to bed the notion that economic growth rates alone (even fallacious ones) can get us out of this fiscal mess we are in. That’s because this deficit is not driven by a lack of economic growth…