Trump's economic proposals could cost trillions, study finds

Published: Aug 28, 2024 Duration: 00:05:18 Category: News & Politics

Tags : Kamala Harris politics donald trump budget 2024 Elections taxes spending The Daily Report with John Dickerson Clips national debt economic proposal

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>>> FORMER PRESIDENT DONALD TRUMP'S TAX AND SPENDING PROPOSALS COULD SEND THE NATIONAL DEBT SOARING. THAT'S ACCORDING TO A NEW STUDY CONDUCTED BY THE NONPARTISAN BUDGET MODEL. IT SAYS TRUMP'S BUDGETS MODELS WOULD INCREASE FEDERAL DEFICITS BY $6 TRILLION OVER THE NEXT DEFICIT. THE DEFICIT INCREASE WILL BE ABOUT FIVE TIMES MORE THAN WHAT THEY WOULD BE UNDER THE TAX AND SPENDING PROPOSALS OF DEMOCRATIC NOMINEE VICE PRESIDENT KAMALA HARRIS. SCOTT LINSCOMB JOINS ME NOW FOR MORE WITH THE CENTER FOR TRADE POLICY STUDIES. SCOTT, THANKS FOR BEING WITH US. THERE WAS A TIME WHEN CANDIDATES OF BOTH PARTIES FELT SOME OBLIGATION TO AT LEAST APPEAR TO BE CONDITIONED ABOUT BUDGET DEFICITS. WE DON'T SEEM TO BE IN THAT PERIOD NOW. IN THE ABSENCE OF CANDIDATES RAISING IT, HOW SHOULD VOTERS THINK ABOUT THE NUMBERS IN THIS MODEL? >> WELL, THEY SHOULD UNDERSTAND THAT WITHOUT SUBSTANTIAL CHANGES TO OUR TAXES AND OUR SPENDING, ESPECIALLY OUR SPENDING, BUDGET DEFICITS ARE REALLY GOING TO JUST CONTINUE TO INCREASE. THEY'RE ALREADY THE DEBT IS AROUND 100% OF GDP. IT'S FORECAST TO GO TO MAYBE 130% OF GDP IN TEN YEARS AND THAT'S EVEN WITHOUT ALL OF THE NEW SPENDING AND TAX CUTS THAT BOTH CANDIDATES ARE PROPOSING. SO THEY NEED TO BE AWARE THAT THAT IS THE REALITY WHETHER WE LIKE IT OR NOT. >> SO REMIND THEM SOME OF THE DOWN SIDES AND I KNOW THERE'S CONSIDERABLE DEBATE ABOUT HOW BIG A DOWN SIDE. SOME PEOPLE THINK THEY'RE JUST SCARE MONGERING EVEN TALKING ABOUT THIS, BUT THE POTENTIAL DOWN SIDES TO A SITUATION WHERE YOUR DEBT IS 100% OF GDP OR 130. >> YEAH. WELL, THE FIRST IS THAT ALL OF THAT GOVERNMENT DEBT CAN CROWD OUT PRIVATE INVESTMENT IN THE PRIVATE ECONOMY AND CAN JUST SLOW DOWN THE ECONOMY OVER TIME. LOWER GROWTH MEANS LOWER LIVING STANDARDS, BUT IT ALSO WILL MEAN LESS TAX REVENUE GOING FORWARD AS THE ECONOMY IS GENERATING LESS OUTPUT AND THAT CAN CREATE KIND OF A VICIOUS CYCLE OF EVER INCREASING DEFICIT. THE OTHER PROBLEM, OF COURSE, IS THAT THE DEBT'S NOT A PROBLEM UNTIL IT IS A PROBLEM AND AT THAT POINT IT'S TOO LATE. WHAT I MEAN IS THAT THE UNITED STATES IS IN A PRIVILEGED POSITION THAT PEOPLE WANT TO BUY U.S. DEBT. THEY SEE U.S. DEBT AS A SAFE HAVEN BECAUSE OF THE STABILITY OF THE U.S. ECONOMY. THE PROBLEM IS THAT WHEN THEY DECIDE OTHERWISE, THEN IT WILL BE TOO LATE. THE UNITED STATES WOULD HAVE TO FRANTICALLY TRY TO RAISE INTEREST RATES TO OFFER A BETTER DEAL ON THAT DEBT. HIGHER INTEREST RATES CAUSE ALL SORTS OF PROBLEMS WITH MORTGAGES AND CREDIT CARDS AND THE REST AND THEN YOU COULD HAVE A FULL ON DEBT CRISIS. WE'RE CERTAINLY NOT THERE YET, BUT WE SHOULDN'T EVEN GET CLOSE TO THAT POINT BECAUSE LIKE I SAID, WE EVER GET THERE, IT WILL BE TOO LATE. >> SO IN PARTICULAR, SINCE FORMER PRESIDENT TRUMP'S DEFICIT NUMBERS ARE SO MUCH HIGHER, LET'S ADDRESS WHAT HE SAYS WILL REDUCE THOSE NUMBERS OR, IN FACT, MAGICALLY PAY FOR IT IS WHICH IS HE SAYS CUTTING TAXES, INCLUDING CORPORATE TAX, WILL MEAN THERE WON'T BE ANY BUDGET PROBLEMS BECAUSE THE REVENUE WILL BE SO GREAT. DOES THAT ANALYSIS HOLD UP FOR YOU? >> WELL, CERTAINLY CORPORATE TAX REFORM, WHETHER IT'S LOWERING RATES OR ADOPTING FULL EXPENSING PROVISIONS THAT ENCOURAGE INVESTMENT, THAT CAN CONTRIBUTE TO GROWTH AND THERE'S A LOT OF ROOM THERE FOR GOOD TAX REFORM PROPOSALS, BUT FROM A PURELY BUDGETARY PERSPECTIVE, IT'S NOT GOING TO BE ENOUGH TO CLOSE THE GAPING HOLE WE HAVE IN OUR CURRENT BUDGET. A LOT OF THAT LIES NOT JUST ON THE TAX AND THE REVENUE SIDE, BUT ALSO ON THE SPENDING SIDE. IN THE OLDEN DAYS REPUBLICANS WOULD PAIR TAX CUTS WITH SPENDING CUTS AS WELL, PARTICULARLY REFORMING ENTITLEMENT PROGRAMS, MEDICARE AND SOCIAL SECURITY, THAT ARE REALLY DRIVING A LOT OF OUR DEBT. TODAY'S REPUBLICAN PARTY HAS NO INTEREST IN THAT. SO THEY'RE CUTTING TAXES WITHOUT ANY MAJOR SPENDING REFORMS AND THAT'S JUST NOT GOING TO DO IT WHEN IT COMES TO THE BUDGET. >> AS A FINAL QUESTION, WE'VE GOT DEBATES COMING UP, AN ELECTION GOING ON. IF YOU HAD TO POSE A QUESTION TO EITHER OR BOTH CANDIDATES, DO YOU HAVE ONE IN MIND THAT YOU WOULD POSE THAT MIGHT HELP GET AT SOME OF THESE CHALLENGES THEY WILL FACE WHEN THEY GET IN OFFICE? >> WELL, AT THE VERY LEAST, I'D LIKE THEM TO BOTH RELEASE DETAILED PLANS ON THEIR TAX AND SPENDING PROPOSALS. THE REALITY IS THAT NEITHER REPUBLICANS, NOR DEMOCRATS HAVE GIVEN US ANALYSTS ENOUGH TO REALLY WORK WITH. SO I GUESS MY FIRST QUESTION IS WHEN ARE YOU GOING TO ACTUALLY RELEASE A SERIOUS ECONOMIC PROPOSAL AS OPPOSED TO A BUNCH OF CAMPAIGN TALKING POINTS? >>

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