Okay, So a Republican Gets to be President. What Happens to the National Debt?
Okay, so a Republican gets to be president. What happens to the national debt?
The national debt is likely to balloon under tax policies championed by three of the four major Republican candidates for president, according to an independent analysis of tax and spending proposals so far offered by the candidates. …WaPo
Except for Ron Paul. His cuts would take $2 trillion out of the budget.
Don’t tell me you’re surprised at this report. For years Republican administrations have been responsible for ballooning debt. Democrats are the ones who come into office and clean up the Republicans’ fiscal mess.
Do we want to let the Republicans do it to us again?
According to the report — set for release Thursday by U.S. Budget Watch, a project of the bipartisan Committee for a Responsible Federal Budget — former Pennsylvania senator Rick Santorum and former House speaker Newt Gingrich would do the most damage to the nation’s finances, offering tax and spending policies likely to require trillions of dollars in fresh borrowing.
Both men have proposed to sharply cut taxes but have not identified spending cuts sufficient to make up for the lost cash, the report said. By 2021, the debt would rise by about $4.5 trillion under Santorum’s policies and by about $7 trillion under those advocated by Gingrich, pushing the portion of the debt held by outside investors to well over 100 percent of the nation’s economy.
The red ink would gush less heavily under former Massachusetts governor Mitt Romney, the report said — at least under earlier Romney proposals that paired $1.35 trillion in tax cuts with $1.2 trillion in spending reductions and would leave the debt rising on a trajectory that closely tracks current policies. …WaPo
NPR also reads the Committee’s report.
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The budget watchdogs give more credit to candidates who spell out specific cuts than those who offer vague targets, like former Massachusetts Gov. Mitt Romney, who pledged to limit government spending to 20 percent of the overall economy.
“Gov. Romney puts forth cuts in spending and cuts in taxes,” MacGuineas says. “Neither of them kind of drastically change the budget, but overall the effects of those tax cuts would outweigh the spending cuts, from what he’s offered so far.”
The committee estimates that Romney’s proposals would add $250 billion to the debt over the next decade.
That’s nothing, though, compared to the red ink that would be spilled by former Pennsylvania Sen. Rick Santorum or former House Speaker Newt Gingrich.
Santorum wants to cut personal income taxes while preserving costly deductions and tripling the tax break for children. So far, he’s offered little to balance those cuts, except $5 trillion in unspecified spending reductions.
“This is the big wildcard for Sen. Santorum so far,” MacGuineas says. “He has said he’ll cut $5 trillion. That would have a significant effect on the overall fiscal effects of his plan. But he has yet to say where that $5 trillion would come from.”
The committee also dings Gingrich for his optional 15 percent flat tax; because everyone would have the option of paying less, government revenues would take a big hit.
“Who’s going to be the person who says I’ll take the system where I’ll pay more?” MacGuineas says. “So in the end, it might be a more desirable tax system for a number of other reasons, but it usually winds up losing revenues and significant revenues in this case.”
The committee estimates that over 10 years, the Gingrich plan would add $7 trillion to the federal debt. …NPR
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