Donald Trump bankrupted his companies six times. He bragged that he was the “king of debt”. He entered office owing more than $1bn to 150 institutions. So should we really be surprised to discover that the president of the United States was only pretending to be a fiscal conservative?
On 12 February, the Trump White House unveiled a $4.4trn federal budget for 2019 that, according to Bloomberg, forecasts the deficit “nearly doubling… to $984bn. The red ink would total $7.1trn over the next decade, the national debt would rise to nearly $30trn, and the budget would not balance.”
Members of the US press corps have been falling over one another to point out what a supposedly dramatic departure this is from “the traditional Republican economic catechism”. The president, observed the Washington Post, “is remaking the Republican economic playbook in his own image, abandoning ideological consistency in favour of a debt-busting strategy”. “Republicans learn to love deficit spending they once loathed,” was the headline in the New York Times.
Yet Trump is no aberration; nor is he an outlier in his party. The reality is that there has never been any kind of “ideological consistency” in favour of balanced budgets or “loathing” of deficit spending on the part of the GOP. Rather, Republicans cynically scream about debts and deficits when a Democrat is in the White House, only to then run up much bigger debts and deficits once a Republican takes over the top job.
Consider the historical record. Except for Barack Obama, who entered office in the midst of the worst financial crisis since the Great Depression, every single Democratic president of the postwar period (Truman, Kennedy, Johnson, Carter, Clinton) has reduced the national debt as a proportion of GDP. In stark contrast, none of the Republican presidents since Richard Nixon left office in 1974 – Ford, Reagan, Bush Sr, Bush Jr – have been able to do the same.
The debt tripled under Ronald Reagan and doubled under George W Bush. Budget deficits also ballooned on their watch – thanks to a combination of unfunded tax cuts and a ramping up of military spending (sound familiar?). In fact, over the past 50 years, the only US president who succeeded in balancing the budget was a Democrat: Bill Clinton.
So Trump is following in the footsteps of his GOP predecessors, aided and abetted in his “debt-busting strategy” by congressional Republicans. The shamelessness of Senate majority leader Mitch McConnell and House speaker Paul Ryan, in particular, has been a sight to behold.
During the Obama era, the two men postured as deficit hawks, constantly lambasting the Democrats for their alleged fiscal irresponsibility. In 2010, McConnell claimed that “the kind of spending and debt Democrats are engaged in… is like nothing this country has ever seen. And it threatens not only the livelihoods of our children; it threatens our national security.” In 2012, Ryan said a “debt crisis is staring us in the face” and suggested the United States could go the way of Greece.
These days, though, McConnell, Ryan and the vast majority of their GOP colleagues on Capitol Hill have not a word to say about the astonishing pace at which Trump is racking up red ink. Instead, they are eager accomplices, joining with the president to pass a huge tax cut in December that, according to Congressional Budget Office estimates, will add a whopping $1.4trn to the national debt over the next decade.
Remember: there is nothing new to this Republican scam. Reagan administration officials back in the 1980s called it “starving the beast”: cut taxes on the rich; increase spending on defence; force up borrowing levels; and then insist on savage cuts to social spending to balance the books. It’s all a big con. They don’t actually care about the deficit; to quote Dick Cheney, speaking in private during the first term of the Bush Jr presidency, “deficits don’t matter”.
Am I being unfair? Listen to GOP senator Rand Paul, a hero to the anti-debt Tea Party. “I can’t in all good honesty, in all good faith, just look the other way just because my party is now complicit in the deficits,” Paul told his fellow senators on 8 February, referring to a Republican spending bill that he called “the very definition of intellectual dishonesty”.
So what should the Democrats’ response be? Mocking the Republicans for their inconsistency and double standards is a good start. House minority leader Nancy Pelosi suggested the “poor deficit hawk” has become “if not an endangered species, extinct, because the Republicans only seem to care about the deficit when it comes time to invest in people. Not when it comes time to give giveaways to corporate America and the wealthiest.”
Yet Democrats cannot afford to box themselves into a fiscal corner by obsessing over the deficit. Why would they want to tie the hands of a future president from their party? Especially when polls show that most Americans don’t care much about the deficit, and recent history demonstrates that none of the deficit doomsayers’ predictions – a rapid rise in interest rates, the collapse of the dollar, a Greek-style meltdown – came to pass.
For Democrats to try to take up the mantle of debt reduction now would be an act of political and economic self-harm. They should slam the Republicans for being hypocrites. But then they should borrow Cheney’s line. Deficits don’t matter. It’s what you use them for that matters. Trump’s budget may have provided Democrats with the ideal opportunity to finally say in public what Republicans have long said in private.
This article appears in the 15 Feb 2018 issue of the New Statesman, The polite extremist