Donald Trump's Psychotic Views On The Federal Budget

In an interview with The Washington Post published over the weekend, Republican presidential nominee frontrunner Donald Trump said several things about the federal budget that are likely to be politely described as “silly” by those who actually understand fiscal policy, economics and basic mathematics.

But that doesn’t accurately describe the depths of Trump’s fiscal irrationality. His understanding of the federal budget is so based on fantasy (“wishful thinking” would be a step up) that it should only be described with one word: psychotic.

Trump has previously proposed a tax cut plan that an analysis by the highly respected Tax Policy Center indicates will increase the federal deficit by $9.5 trillion over the next 10 years. That remarkable number doesn’t include the interest costs that will be incurred if the government has to increase the national debt to pay for those tax cuts.

But Trump says there will be no additional borrowing. He says he’ll pay for his tax reduction with the politician’s best budget friend -- cutting waste, fraud and abuse. In other words, he won’t have to reduce the federal programs and services voters like and want.

But the TPC says that, in reality, federal spending would need to be cut by a whopping 21 percent in 2025 to do what Trump wants and that couldn’t be accomplished even if the entire military budget were eliminated let alone just by cutting Pentagon waste.

TPC also said that if military spending were untouched, Trump would have eliminated 82 percent of domestic appropriations or 41 percent of Medicare and Social Security.

But Trump has previously said that he will not cut Medicare and Social Security and will increase, not decrease, the Pentagon’s budget.

Put it all together and Trump is irrationally saying that he’ll pay for his massive tax cuts by reducing all domestic federal departments and agencies – everything from veterans to national parks to homeland security to border control to the National Institutes of Health and the Center for Disease Control – by a preposterous amount given their continual bipartisan support in Congress.

And without these cuts, Trump is really proposing the huge increase in the national debt that he’s promising won’t happen if he’s elected.

Trump’s huge federal budget disconnect went further even further in The Washington Post interview.

In spite of the implications his previous positions that indicate there really will be a huge increase in the amount the government will need to borrow, Trump told Post reporters Bob Woodward and Robert Costa (transcript here) that he would do even better than not increase the federal debt; he will eliminate it entirely in just eight years.

According to the Office of Management and Budget federal debt held by the public will be more than $14 trillion (more than $19 trillion including debt held by federal agencies) by the end of fiscal 2016. Depending on how Trump decided to define the debt, eliminating it in eight years would mean annual increases in revenues and or spending cuts of between $1.7 trillion and $2.4 trillion.

But, as noted above, Trump has said he wants to cut taxes and not touch military spending, Medicare or Social Security, ahe already needs to cut domestic programs by more than 80 percent to pay for his tax cuts. So he’ll need to eliminate the increasingly popular Medicaid, hope that interest rates go down so interest on the debt at least doesn’t rise and get continuous growth so unprecedentedly high it will make Ronald Reagan’s absurd “rosy scenario” from the 1980s look like conventional economics.

Given that he can’t or won’t cut spending to make a dent in the deficit and then to run the surpluses needed to pay down the debt, it’s not clear how interest rates could fall given the even higher growth Trump will need to make his program work. And if rates go up, so will federal interest payments and other spending cuts will need to be even higher.

It’s also anything but clear how the levels of sky-high growth Trump will need can be reached while the government is running large budget surpluses.

What may be most troubling is that Trump is saying all this about the budget because he apparently thinks it’s believable and will be believed. That’s truly psychotic.