Economists told Fox News Digital that the economic proposals put forward by former President Donald Trump and Vice President Kamala Harris would further widen the nation's already ballooning budget deficit, with both candidates calling for fiscal responsibility. He pointed out that he did not seem particularly concerned.
Neither Trump nor Harris have announced a dedicated policy plan to address the nation's budget deficit. Trump's 16-point policy plan The word “deficit” came up once on his website.
meanwhile, Harris' economic platform Although she has repeatedly mentioned the deficit and said she is “committed” to fiscal responsibility, she has only suggested raising taxes on the wealthy and corporations as a solution.
“The reason neither candidate is seriously talking about fiscal responsibility is probably because neither candidate is fiscally responsible,” said Erica York, senior economist at the Tax Foundation. “With neither of them providing many details, questions remain about how Harris' spending policy will stack up. Will Trump really eliminate all green energy tax credits? Will he? Will they really impose all the tariffs they promised?”
Asked what Ms. York's message was to Mr. Trump and Ms. Harris about the deficit, she said, “Think about it seriously.”
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“We face several challenges in terms of fiscal policy, from debt and deficits to the need to compete with China to the need to encourage entrepreneurship and work, but the tax policy currently outlined None of these visions come close to providing answers or addressing those challenges,'' York said.
Republican Representative Thomas Massie of Kentucky wears a handmade Treasury watch pin at the U.S. Capitol on Thursday, January 26, 2023 in Washington, DC.
Kimberly Clausing, an economist at the Peterson Institute for International Economics, echoed York's concerns, adding, “I don't think there's been enough focus on the deficit in this campaign.”
“I don't know whether to blame the candidates or the concentration of the American people,” Clausing said. “Candidates have an incentive to try to respond to what the public wants to hear, but there doesn't seem to be much support for fiscal responsibility. The problem was much more pronounced.
So far, the government has an accumulated deficit of $1.9 trillion in fiscal year 2024, according to the report. Bipartisan Policy Center's Deficit Tracker.
Meanwhile, revenue grew 11% over the last month. The increase in revenue was primarily due to increases in personal and corporate taxes, higher interest rates and a 20% decline in personal income tax refunds, according to the deficit-tracking group. Trump's economic proposals include extending tax cuts, lowering the corporate tax rate and exempting tips, overtime pay and Social Security benefits from taxable income. Despite his plan to generate revenue through the repeal of tariffs and green energy tax credits, economists say it won't be enough to offset revenue lost from Trump's tax cuts and other economic proposals. are.
A study by the Tax Foundation, a tax policy nonprofit in the nation's capital, estimates that the Trump administration's deficit impact will increase by about $4 trillion over 10 years.
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But according to Richard Stern, an economist at the Heritage Foundation, the real cause of ballooning deficits is government spending, not tax cuts.
“Tax cuts can increase deficits, but that money goes back to the people who earned it,” Stern said. “Increasing deficits due to increased spending, on the other hand, means the government steals more and suppresses growth even more violently.” means,” he said. “Deficits created by tax cuts and spending increases are not the same. Tax cuts grow the economy and reduce the share of deficits in the economy, but increased spending puts pressure on the economy and inhibits growth.”
The Treasury Department is seen in Washington near sunset. (AP Photo/John Elswick, File)
The Biden-Harris administration's fiscal year 2024 budget proposed the highest sustained spending levels in U.S. history, it reported. Republicans on the House Budget Committee. The committee also noted that the administration's plan to add $82.2 trillion in spending over 10 years is 18% higher than the historical average over the past half-century.
Since becoming the official Democratic presidential nominee, Harris has said: $25,000 housing grant for first-generation homebuyers; Provides $100 billion in tax credits for manufacturing and increases tax credits for small businesses tenfold. He also proposed support for increased government spending to support families' child care needs, along with an expansion of the child tax credit, among other proposals.
All told, the Tax Foundation estimated that Harris' budget deficit would increase by about $1.5 trillion over 10 years.
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Among the downstream effects of rising deficits are higher interest rates and a decline in a country's creditworthiness, which could be problematic at a time of heightened global tensions, Clausing said. be.
“When new crises come along, whether it's a pandemic, a national security crisis, a major recession, sometimes they're caused by things that are beyond our control. You know. As such, this type of crisis is very difficult to respond to without financial resources,” Clothing said. “If you start by maxing out your credit cards, it becomes a little harder to respond to emergencies like this.”
Currently, China and Japan are the two largest foreign creditors of the United States.
Former President Trump and Vice President Kamala Harris will face off Tuesday night in Philadelphia. (Getty Images)
The Harris campaign declined to comment when contacted by Fox News Digital.
The vice president received endorsements this week from more than 400 left-leaning economists and former policy makers who served in Democratic administrations. Additionally, New York Times financial columnist Andrew Ross Sorkin argued this week that Harris could come much closer to balancing the national budget than Trump.
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As for voters, they typically tell pollsters that they have more confidence in Trump than Harris on the economy, but there have been recent reports that Harris is regaining some of that support. is shown. Trump's lead over Harris on the economy is just 5 points in a recent Fox News poll and just 2 points in an AP/NORC poll.
“Dangerous liberal Kamala Harris’ budget proposal would increase the national debt by $17 trillion by 2034 and also include a record $4.9 trillion tax increase, the largest in history. “This will cost every American household nearly $40,000 a year on top of the costs of high inflation,” Trump campaign press secretary Caroline Levitt told Fox News Digital. “Families are already struggling to afford gas and groceries thanks to Kamalanomics, and President Trump continues to emphasize how Harris' budget will make these hardships even worse for hardworking Americans.” I will continue to do so.”
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