Trillion is the New Billion: In Perspective
Permanent annual $1 trillion federal budget deficits are set to begin this year, and presidential candidates are throwing around trillion-dollar proposals like campaigns of old used to hand out buttons to attract votes.
National debt is already high by historical standards and rising rapidly. Adding trillions more will make an already bad situation much worse. Let’s put these trillion-dollar proposals in perspective.
Historic Heights
It wasn’t that long ago that “trillion” was barely in our vocabulary. The United States went some 200 years before it accumulated $1 trillion in federal debt in late 1981. Today, gross national debt is over $23 trillion and debt held by the public is over $17 trillion. Legislation signed into law by President Donald Trump will add $4.7 trillion to the debt through 2029.
The nonpartisan Congressional Budget Office (CBO) projects that we will add more than $14 trillion to the debt over the next decade. Instead of proposing ways to fix the debt, candidates are competing to add even more to the nation’s credit card. For example, the health care plan from Senator Bernie Sanders would cost $13 trillion over ten years even when factoring in the proposed offsets.
A Class by Itself
Many candidates propose taxing corporations and the wealthy to finance their grandiose plans, but the price tag for their proposals is on another level. For instance, the combined $1.1 trillion in profits of all Fortune 500 companies in 2018 would fall short of paying for the $1.6 trillion yearly cost of the climate plan from Senator Sanders.
Shooting for the Stars
The trillions being discussed are truly astronomical. A stack of 1 trillion $1 bills would reach one-quarter of the way from the earth to the moon. The combined ten-year cost of the climate ($1.7 trillion), infrastructure ($1.3 trillion), housing ($340 billion), post-secondary education ($750 billion), and preschool and K-12 education ($850 billion) plans from former Vice President Joe Biden would go beyond the moon.
The Costs Are Personal
CBO warns that high national debt will reduce incomes and increase the costs of home, auto, student, and credit card loans for families. Looking at the costs of trillion-dollar plans from this perspective is important.
The combined annual cost of the climate, College for All, Housing for All, and universal child care and pre-Kindergarten plans from Senator Sanders comes out to $17,364 per U.S. household. That is more than a quarter of the median U.S. household income of nearly $62,000 in 2018.
While the candidates have proposed offsets for some of their plans, there is considerable debate over how much of the cost will be covered and it is not certain that the significant tax increases will gain enough support to be enacted.
Add to this that President Trump has signaled that he will propose more tax cuts as he seeks re-election, and it is clear that fiscal responsibility has taken a back seat in this election. That is a sad and scary fact.
