Trump's $30 trillion debt disaster
In sum, candidate Trump tossed out proposals to cut federal income taxes for upward of 150 million filers at a 10-year cost of $12 trillion. Such relief would amount to about 32 percent of the country's income tax revenue over that period, according to the Congressional Budget Office, and it would reduce total federal revenue collections from all sources to just $55 trillion.
Meanwhile, the CBO's spending baseline totals about $89 trillion over the same 10-year period ending in fiscal 2035. So either Trump is looking to add a staggering $34 trillion to the nation's already towering $36 trillion of existing debt or he means to slash spending by truly massive amounts.
Well, it's obviously not the latter. The president has
increase spending for defense, security assistance to other countries, homeland security, law enforcement, and border control, which under current policy would amount to about $12 trillion over 10 years. And whether they acknowledge it or not, Trump administration staffers can't cut net interest expense or legally protected military and civilian employee pensions, which will cost upward of $16 trillion over the next decade.
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The problem, of course, is that these programs alone add up to $70 trillion, or nearly 80 percent of the CBO spending baseline. So even if the Trump administration massively slashed the rest of the federal government — including Health and Human Services, the Environmental Protection Agency, and the departments of Labor, Interior, Energy, and Transportation — the red ink would still total far more than $30 trillion through 2035.
Either way you cut it, this amounts to plunging into a paroxysm of fiscal madness. Yet the alternative routes often advocated by MAGA partisans — taking the ax to fraud and waste or spurring accelerated economic growth with tax cuts and deregulation — simply won't make a dent in the Brobdingnagian magnitude of the nation's debt spiral.
And I do mean massive. The CBO never says the quiet part out loud, but its current long-term outlook has the public debt hitting 166 percent of the country's gross domestic product by mid-century. The quiet part it doesn't publish is that 166 percent of GDP is equal to a stunning $150 trillion of public debt.
Needless to say, long before the debt hits this staggering figure, the whole financial system would implode. Every remnant of America as we know it would go down the tubes.
So as helpful as the Department of Government Efficiency campaign against waste and inefficiency might be, it is virtually irrelevant when it comes to staunching a public debt that is hurtling fast toward catastrophe.
I recently recommended a plan to the DOGE commission in my book 'How to Cut $2 Trillion' that would save $85 billion per year in agency staff and overhead costs. But to get there, one would need to embrace a strict libertarian policy menu calling for the elimination of 16 agencies entirely, including the FBI, Education Department, USAID, and the national endowments for arts, humanities, and democracy; shrink another nine departments by 50 percent, including the EPA, FAA, NASA, and IRS; and trim the rest of the nondefense agencies by 34 percent, which would require reducing the 1.05 million staff at the Veterans Administration, Homeland Security, Social Security Administration, and the Justice and Interior departments, among others, by 360,000 employees.
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That is, the Trumpian fiscal framework starts with a $30 trillion-plus deficit over the next decade. Yet all of the above sweeping retrenchments of Washington as we know it would not save even $1 trillion over the same period.
Likewise, the 'growth' illusion has been the GOP's go-to fiscal subterfuge for several decades. But given that the US economy is now crushed under a burden of $101 trillion of public and private debt, eking out sustainable real growth above the already optimistic CBO assumptions simply isn't in the cards. Between the pre-crisis peak in 2007 and the fourth quarter of 2024, for instance, real GDP rose by 1.9 percent per year, and that included the benefit of both the Bush tax cuts being renewed in 2012 and the huge Trump tax cuts being added in 2017.
Still, the CBO now assumes growth will average 2.4 percent over the next decade — notwithstanding the headwinds of the soaring debt burdens and the fact that the Federal Reserve is out of dry powder and will be in no position to restart the printing presses any time soon. Besides, even 3 percent annual growth would only boost revenue by about $2.5 trillion over the decade, at best.
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In short, I don't see any route by which Trump's second time at bat would generate anything less than $30 trillion of added debt over the next decade. And that would be an outright calamity.
David Stockman is a board member of the Committee for a Responsible Federal Budget. He served as the director of the Office of Management and Budget in the Reagan administration.
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