News Journal:Trump’s boasts of ‘historic’ economic growth for US could come back to haunt him

“We’ve accomplished an economic turnaround of historic proportions.”
President Trump constantly congratulates himself about dozens of “historic “ accomplishments (“largest inaugural crowd,” “biggest tax cut,” and my personal favorite, “the greatest speech ever given to the Boy Scouts”) and he is always wrong. But never more so than his claim that he is responsible for “an economic turnaround of historic proportions.”
Memories are short — necessarily so if you want to believe our president — but many of us remember the very scary winter of 2008-2009. When Barack Obama was inaugurated on Jan. 21, 2009, the United States was mired in the worst economic crisis since the Great Depression of the 1930s.
In the four months leading up to that day, we had lost almost 3 million jobs. The Dow Jones Industrial Average stood at 7,949. It had lost 50 percent of its value since hitting its market high in October of 2007.
By all measures, the economy was in free fall.
After less than a month in office, President Obama rallied the country and, in spite of almost unanimous opposition from the Republicans in Congress, signed into law “The American Recovery and Reinvestment Act of 2009” on Feb. 17, 2009.
Within a month after his signing that bill, the stock market hit bottom and started its climb to record highs. Job losses quickly slowed and then turned into job gains.
By the end of his presidency, we had experienced 75 straight months of job growth. The Dow stood at 15,882, just about double what it had been eight years earlier.
This was the economy Donald Trump inherited in January 2017.
No one questions the fact that it has done extremely well since then. But no one can seriously call it an “economic turnaround,” much less one of “historical proportions.” An economy that was doing well has continued to do so, and in fact has accelerated.
Some of that acceleration can be attributed to the Trump tax cut. Certainly the stock market got an extra bounce upward. But that tax cut, in addition to not delivering for the middle class in the country, has had a major negative effect on the financial stability of the country.
It has directly caused major losses in federal government revenues, as wealthy individuals, banks and corporations have taken advantage of the reduced taxes and generous tax loopholes. Unsurprisingly, this is contributing to major increases in our annual deficits and the national debt.
The annual deficit for 2018 is forecast to hit $779 billion, $113 billion more than last year. Normally, with a growing prosperous economy, deficits would be coming down, not going up.
Even worse, the Committee for a Responsible Federal Budget’s latest projection is for an annual budget deficit that could hit $1 trillion next year.
The Congressional Budget Office (CBO) reported “at 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, CBO projects, growing budget deficits would boost that debt sharply over the next 30 years; it would approach 100 percent of GDP by the end of the next decade.”
This is not surprising because, in addition to the massive tax cut, President Trump and the Republican House and Senate have been on a spending spree. First there was the $300 billion budget bill and then the $130 billion passed for disaster relief.
Historically, Democratic and Republican congresses adhered to a program called PAYGO. PAYGO required that, before Congress passed spending proposals in the budget, offsets had to be included that would pay for the spending. The present Congress has suspended PAYGO, and no offsets have been required for any of its spending.
Will it all catch up to the “amazing, stupendous, incredible” (our president’s descriptive adjectives, not mine) Trump economy?
On Friday, the stock market fell again. The Standard & Poors 500 dropped almost two percent, bringing it down 10 percent since September.
And now there’s the new Trump promise to cut middle-class taxes by 10 percent before the next election. Maybe just after the Mexicans pay for The Wall?
Ted Kaufman is a former U.S. senator from Delaware.