Republicans are betting trillions on the hope that the economy will grow fast enough to cover their deficit spree.
Washington is running its largest peacetime budget deficit in American history. The national debt held by the public has leaped from 40 percent of the economy in 2008 to 100 percent today—on its way towards 250 percent of gross domestic product (GDP) within three decades. At that point, interest alone would consume two-thirds or more of all federal taxes. And yet, even as a nervous bond market is pushing up interest rates, President Donald Trump—who enacted $8 trillion in spending hikes and tax cuts in his first term—proposes doubling down with even more tax cuts and spending expansions.
How can Washington possibly pay for trillions more in promises on top of this unsustainable debt? According to Republicans in Washington, it's simple. Just grow the economy so fast that the resulting revenues will pay for it all.
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Jessica Riedl (formerly Brian Riedl) is a senior fellow at the Manhattan Institute. Follow her on Twitter here.
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