10 years after Trump vowed to erase the national debt, it has doubled

Ten years ago today, Donald Trump declared that he would pay off the national debt in just eight years.

This did not happen. Instead, the gross national debt has double since that day – from about $19 trillion to over $39 trillion. Much of this additional borrowing occurred during Trump’s five years in the White House.

The gap between Trump’s far-fetched promise and the brutal fiscal reality of the past decade is not just a political trap. It is also a good illustration of the scale and speed with which debt has skyrocketed. And it’s a painful reminder of a missed opportunity that Americans will face for a long, long time. The bill for these 10 years of fiscal profligacy will come due long after Trump finally leaves the political scene.

But it’s a story that begins, as everything seems to do in politics these days, with Trump.

“We are not a rich country. We are a debtor nation,” then-candidate Trump said. The Washington Post in a March 31, 2016 interview (a full transcript was released two days later). “We need to get rid of the $19 trillion in debt.”

How long would it take to do that, asked the JobIt’s Bob Woodward.

“Pretty quickly,” Trump responded. When asked for a more specific answer, Trump provided a shocking timeline. “Well, I would say over a period of eight years.”

This would never happen. As the Committee for a Responsible Federal Budget (CRFB) pointed out shortly after Trump’s comments made headlines, “achieving this goal would be virtually impossible, especially for a candidate who has proposed deep tax cuts and ruled out significant welfare reforms.”

Instead, the CRFB estimated that Trump’s proposals would result in the national debt nearly doubling within 10 years. The group arrived at that figure by taking the existing debt baseline — which as of early 2016 was projected to reach about $28 trillion by 2026 — and adding the estimated cost of Trump’s various campaign promises.

It is worth appreciating how remarkably accurate this assessment turned out to be. The number crunchers at the Congressional Budget Office and CRFB didn’t know there would be a pandemic. They didn’t know the outcome of the big tax and spending bills that Trump and President Joe Biden would pass. Hell, they didn’t even know who would be president – ​​remember, in April 2016*, most of the political class didn’t believe Trump had much of a chance.

The accuracy of that prediction indicates two things, said Marc Goldwein, senior policy director at CRFB, when asked about it this week. First, the extent to which the increased debt was incorporated into the federal budget before Trump took office. Social Security and Medicare are the largest federal programs, and both were poised to borrow more during the 2020s.

Second, this is because Trump has kept many of his campaign promises. That’s not the compliment it might sound like. Trump pledged not to touch the aforementioned welfare programs that were driving borrowing to new heights, and he promised both to cut taxes and increase military spending. It was a recipe for higher deficits, and in his first four years in office, Trump added more than $8 trillion to the national debt he had once sought to “get rid of.”

Biden picked up where Trump left off, adding another $4.7 trillion to the debt with various proposals. In his first year in the White House, Trump did nothing to address the growing debt. The federal government borrowed $1.8 trillion in the fiscal year that ended in September and is on track to borrow about the same amount this year.

What did Americans get from a decade of massive borrowing that doubled their debt? Higher inflation and higher interest rates, for starters.

A recent analysis from the Yale Budget Lab found that federal borrowing since 2015 has contributed to rising yields on long-term Treasury bonds. These increases, in turn, have put upward pressure on interest rates and will, in coming years, make it harder for Americans to finance their homes, cars and other things.

For a typical 30-year mortgage, borrowing costs today are about $2,500 more per year than they would be in the alternate reality where federal borrowing did not explode over the past decade, the Yale Budget Lab estimates. Likewise, the average auto loan costs $120 more per year, and the average small business loan costs $770 more.

Meanwhile, Americans will also face higher taxes or reduced government services to pay their debt. Interest payments on the national debt will exceed $1 trillion this year, or about 20% of all tax revenue.

A few lessons can be learned from all this.

First, trust budget experts more than politicians. Trump’s promise to pay down the national debt may be an impossible campaign promise, but he is certainly not the first or last politician to make unrealistic claims about fiscal policy. Next time this happens, pay more attention to what the CBO or CRFB says than anything else.

To that end, I asked Goldwein for a realistic goal that a potential presidential candidate should set for the country.

The key, he says, is to prevent the debt from growing faster than the economy as a whole, as it has recently. Capping budget deficits at 3% of gross domestic product would stabilize debt and impose necessary constraints on future borrowing.

Second, regarding Trump, the statement he made 10 years ago to Job remains an illustrative example of the way in which he engages in politics. Saying he could pay off the national debt in eight years was a ridiculous and grandiose promise made out of the blue, without any semblance of a plan or even the intention of implementing it.

This seems particularly relevant now, as the Trump administration tries to determine the next steps in a war with Iran that it launched in an equally grandiose and improvised manner.

Trump has been making this up for a decade now, and Americans will have to pay the price.

*CORRECTION: The original version of this piece incorrectly indicated this date.