World Economy

Trump Policies Would ‘Explode’ National Debt by $5t

Trump Policies Would ‘Explode’ National Debt by $5tTrump Policies Would ‘Explode’ National Debt by $5t

Debt-cutting measures need to be a consideration for president-elect Donald Trump, as he prepares to execute on campaign promises to boost infrastructure spending, rebuild the military and slash taxes, according to the bipartisan co-chairs of the Campaign to Fix the Debt.

Trump policies, without red ink-reducing components, “[by] our estimate would explode the debt by $5 trillion in the first 10 years ... and by the end of 10 years our debt as percentage of GDP would be over 100%,” Democratic former Pennsylvania Gov. Ed Rendell told CNBC’s “Squawk Box” on Tuesday.

There are ways for Trump to reduce the national debt of nearly $20 trillion while still pursuing his policy agenda, said Judd Gregg, Republican former New Hampshire senator and governor and Rendell’s co-chair at Fix the Debt.

“We put together a Simpson-Bowles 2.0 plan, which is sort of a comprehensive proposal, and we’ve also set up a cafeteria line of ideas on how you can address things like tax reform, which is absolutely critical. It should be one of the first things out of the box,” Gregg said.

“I think tax reform would create massive economic activity, which would actually help us significantly out of our debt problems,” he said, while predicting that it’s possible for the US economy to once again grow at a 4% rate, after being stalled since the 2008 financial crisis.

The reference to Simpson-Bowles was a nod to the 2010 debt-reduction plan that never got off the ground. It was crafted by Republican Alan Simpson and Democrat Erskine Bowles, co-chairs of President Barack Obama’s debt commission.

Bowles, White House chief of staff under President Bill Clinton, and former Wyoming Senator Simpson in 2012 founded the Campaign to Fix the Debt.

Meanwhile, the New Yorkers who traveled to Shanghai last week for the Real Deal magazine’s annual showcase were supposed to talk about investment opportunities in US real estate—but ended up reassuring each other that property values will be going up with the election of Donald Trump.

“It was supposed to be about real estate and the EB-5 program [which grants American permanent resident status to foreigners who invest $500,000 and create jobs], but it turned into a Trumpathon,” one attendee said.

“Relax, take a deep breath. The United States is still the United States,” former Gov. George Pataki said, addressing concerns that Trump’s presidency will hurt US-China relations.


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