Trump, in a recent interview with Sean Hannity of Fox News, said he was going to lower the $21 trillion in debt that’s currently crippling America.
What a miracle that would be. Truly, lowering U.S. debt would set this nation on a course of prosperity and freedom for years — decades, even — to come. more …
Opinion: Miracle? No, supply side economics – Yes.
While the 4.1% second quarter GDP report was a pleasant surprise, there was one non-recurring factor of impending tariffs which gets multiple players to shift their production or sales into one quarter vs. another. That is why it is important to take a look at GDP growth over a year or longer time frame.
If 2018 ends at 3% growth, it would be a gigantic improvement over Obama’s 1.8% over 8 years.
The trade deficit/national debt relationship is one of the more complicated issues facing the US economy. President Trump is correct that by reducing the trade deficit we can in a round about way reduce the national debt.
When we spend more abroad than we earn, the rest of the world has more of our dollars than we have of their currencies. Those dollars can be used to buy US debt, stocks or real estate. BUT if the government continues to spend more than it receives in income taxes, the deficit will continue to grow making the national debt climb.
IF the trade deficit were lowered, and IF the economy were to grow more than 4-5% for a sustained period of time, income tax receipts would grow and the national debt could be lowered substantially.
The problem is SPENDING, and the next quarter is already $50 billion above previous estimates.