Hype and Hyperbole About Trump's Budget
“President Trump’s budget would not add to economic growth or eliminate the deficit in coming years, the nonpartisan Congressional Budget Office said Thursday,” The Washington Post ominously reports, adding the editorial comment that the news “cast[s] doubt on a plan the White House has touted as central to achieving the president’s domestic agenda.”
First, let’s stipulate that Donald Trump’s budget has almost zero chance of passing Congress. Presidential budgets rarely do. Instead, the president’s budget is more or less a guidepost he hopes Congress will follow.
But Leftmedia spin is at least largely that — spin. National Review’s Robert VerBruggen writes, “Overall revenues would fall nearly $900 billion while outlays fell $4.2 trillion, for a net deficit reduction of $3.3 trillion. As of 2027, debt would be 80 percent of GDP, just a few points higher than it is today, instead of 91 percent, as under current law.”
The Trump administration predicts 3%+ economic growth resulting from this budget combined with ObamaCare repeal and tax reform, saying those policies would yield even more revenue and eliminate the entire deficit. While Trump almost surely overestimates how “bigly” his budget would help the economy, the Keynesian economic model used by the CBO doesn’t properly account for economic growth resulting from tax or spending cuts. “It’s not surprising that a bureaucracy which underestimated by more than 100% ObamaCare participation would also underestimate the economic benefits of MAGAnomics,” Office of Management and Budget spokesman John Czwartacki said. “MAGAnomics” is a portmanteau of “Make America Great Again” and economics.
Finally, it’s worth repeating that all of Barack Obama’s “stimulus” led to economic growth averaging less than 2% — and never as much as 3% — despite all of his promises of saving America from George W. Bush. All Obamanomics brought was a doubling of the national debt and a stagnant economy. Is Trump wrong to try something else?