Economists told Fox News Digital that the economic proposals put forward by former President Donald Trump and Vice President Kamala Harris would continue to increase the country’s already growing budget deficit, and noted that neither candidate seems particularly concerned about fiscal responsibility.
Neither Trump nor Harris have released specific policy plans to address the country’s deficit. trump 16 point political plan on its website it mentions the word “deficit” once.
Meanwhile, Harris’ economic platform mentions the deficit several times and says Harris is “committed” to fiscal responsibility, but only suggests raising taxes on the wealthy and corporations as a solution.
“I think the reason neither candidate is really talking about fiscal responsibility is because neither candidate is fiscally responsible,” said Erica York, senior economist at the Tax Foundation. “Both have left many details unspecified, so there are still questions about how Harris’ spending policies would compare. Would Trump really repeal all green energy tax credits? Would he really impose all the tariffs he has promised?”
When asked what message York had for Trump and Harris when it comes to the deficit, he told them to “be realistic.”
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“We face several challenges on the fiscal policy front, from debt and deficits to the need to compete with China, to the need to encourage entrepreneurship and jobs, and none of the fiscal policy visions that are being outlined right now comes really close to answering those challenges,” York said.
Rep. Thomas Massie, R-Kentucky, wears a homemade national debt watch pin at the Capitol in Washington, DC, U.S., Thursday, Jan. 26, 2023.
Meanwhile, Kimberly Clausing, an economist at the Peterson Institute for International Economics, echoed York’s concerns, adding that she “doesn’t think there’s been enough attention paid to the deficit this campaign season.”
“I don’t know whether to blame the candidates or the American attention span,” Clausing said. “Candidates have an incentive to listen to what the population wants to hear, but there doesn’t seem to be a big splash in favor of fiscal responsibility. And that’s a big contrast to some previous elections, at least in my lifetime, where that issue was much more prominent.”
So far in fiscal year 2024, the government has a cumulative deficit of $1.9 trillion, according to the Bipartisan Policy Center’s “Deficit Tracker.”
Meanwhile, revenue was up 11% through last month. The revenue increase, according to the deficit tracker, is largely the result of increased individual and corporate taxes, higher interest rates and a 20% decrease in individual income tax refunds. Trump’s economic proposals include expanding tax cuts, reducing the corporate tax rate and exempting tips, overtime pay and Social Security benefits from taxable income. Despite his plan to generate revenue through tariffs and repeal green energy tax credits, economists say it won’t be enough to offset revenue lost from Trump’s tax cuts and other economic proposals.
Research by the Tax Foundation, a nonprofit tax policy organization in the nation’s capital, estimated that the impact of Trump’s deficit would be approximately a $4 trillion increase over ten years.
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However, according to Richard Stern, an economist at the Heritage Foundation, it is government spending, not tax cuts, that is the real culprit for the growing deficit.
“While tax cuts may increase the deficit, they return that money to the people who earned it. Deficit increases due to higher spending, on the other hand, mean the government is stealing even more and stifling growth even more intensely. “Stern said. “Deficits created by tax cuts and spending increases are not the same thing. Tax cuts grow the economy and reduce deficits as a proportion of the economy, while increased spending strangles the economy and slows growth.”
The Treasury Department is seen near sunset in Washington. (AP Photo/Jon Elswick, File)
The Biden-Harris administration’s fiscal year 2024 budget proposed the highest sustained spending levels in U.S. history, according to Republicans on the House Budget Committee. The committee also noted that the administration’s plan to add $82.2 trillion to spending over ten years is 18% more than the historical average over the past half century.
Since becoming the official Democratic Party presidential candidate, Harris has said she will provide $25,000 housing subsidies for first-generation homebuyers, implement $100 billion in tax credits for the manufacturing sector and increase small business tax credits tenfold. He has also suggested support for increasing government spending to meet families’ child care needs, while expanding the child tax credit, among other proposals.
Overall, the Tax Foundation estimated that Harris would increase the deficit by about $1.5 trillion over ten years.
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According to Clausing, the subsequent harmful effects of a widening deficit include rising interest rates and reducing the country’s creditworthiness, which can be problematic at a time when global tensions are at their limit.
“If a new crisis arises, whether it’s a pandemic, a national security crisis or a major recession, which are sometimes caused by things outside of our control. It’s really difficult to respond to that type of crisis without fiscal space.” Clausing said. “If you start from a point where you’re maxing out your credit card, it’s a little bit harder to respond to these emergencies.”
Currently, China and Japan are the United States’ two largest foreign creditors.
Former President Trump and Vice President Kamala Harris face off Tuesday night in Philadelphia. (Getty Images)
When contacted by Fox News Digital, the Harris campaign declined to comment.
The vice president received endorsements this week from more than 400 left-leaning economists and former policymakers who served under the Democrats. Additionally, New York Times financial columnist Andrew Ross Sorkin insisted this week that Harris will be able to get much closer to balancing the national budget than Trump.
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When it comes to the electorate, voters have generally told pollsters that they have more confidence in Trump than Harris when it comes to the economy, but reports have indicated that Harris is regaining some of that ground more recently. Trump’s lead over Harris on the economy is just five points in a recent Fox News poll, and just two points in an AP/NORC poll.
“Kamala Harris’ dangerously liberal budget would add $17 trillion to the national debt by 2034 and also includes a $4.9 trillion tax increase, the largest in history, that would cost each American family nearly $40,000 a year. year, in addition to record costs. high inflation,” Trump Campaign National Press Secretary Karoline Leavitt told Fox News Digital. “Thanks to Kamalanomics, families are already struggling to afford gas and food, and President Trump will continue to highlight how Harris’ budget will exacerbate these hardships for working Americans.”
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