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Not one presidential candidate cares about the debt and deficits


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Opinion: Not one presidential candidate cares about the debt and deficits
By Howard Gold
Published: Feb 3, 2016 5:12 a.m. ET

Even the Republicans have tax-cut plans that make the deficit much worse

As president, Bernie Sanders’ tax increases worth $13.6 trillion would likely be more than offset by his spending plans for single-payer national health care and free college for all.
After Monday’s Iowa caucuses, the 2016 presidential election campaign is now in full swing.

But as candidates focus on immigration and terrorism (Republicans), and income inequality (Democrats), one issue has been missing in action: debt and deficits.

Former Secretary of State Hillary Clinton and Sen. Bernie Sanders don’t discuss it much at all, reflecting Democratic primary voters’ complete indifference to the problem. And though rapidly growing federal debt spurred the Tea Party victory of 2010, many Republican presidential candidates have tax-cut plans that make it much, much worse.

Almost no one (except Gov. Chris Christie) has gone beyond vague platitudes on the politically toxic issue of Medicare and Social Security, which along with other mandatory spending (or “entitlements”) comprise two-thirds of federal spending.

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Meanwhile, on Capitol Hill, Republicans under new Speaker of the House Paul Ryan already have made a big retreat from fiscal restraint just when the Congressional Budget Office estimates that budget deficits will begin rising again this year after years of declines.

This means that the brief era of fiscal austerity, which began with the debt-ceiling showdown between President Obama and Congress in 2011, is officially over.

No matter who is elected president (and I’ll discuss candidates’ tax proposals later), we’ll likely see more unpaid-for tax cuts or spending increases that will hit just as Baby Boomers retire en masse and consume rather than contribute to Social Security and Medicare.

In plain English, we’re screwed.

How did it happen? Blame business as usual in Washington, D.C., and the fantasies and delusions that politicians and partisans of both parties embrace rather than deal with fiscal realities.

Back in 2011, to avoid default, the president and Congressional Republicans agreed to set up a bipartisan super committee that would find $1 trillion in spending cuts over the next decade. Predictably, it failed, triggering “sequestration,” automatic cuts in discretionary domestic and military spending.

Everybody in D.C. hated the sequester’s meat-ax approach, but its $1 trillion in spending cuts and a big boost in tax revenues because of the economic recovery helped the federal deficit fall to a seven-year low of $439 billion last year, 2.5% of GDP. This hiatus gave Congress and the president a great opportunity to get our fiscal house in order.

Alas, it was not to be. Last November, outgoing House Speaker John Boehner cut a deal with the president to raise the debt limit, fund the government and avoid further budget battles until 2017.

But it also added an estimated $154 billion in extra domestic and military spending over the next 10 years, only half of which was “truly paid for,” according to the nonpartisan Committee for a Responsible Federal Budget (CRFB).

When I wrote then that Congress may have blown its last chance to fix the debt problem, I wondered whether I was getting a little carried away.

Turns out I wasn’t being alarmist enough.

Having abandoned spending restraint, in December Congress — now under the leadership of Speaker Ryan — started dynamiting the revenue side.

It passed — and the president signed — a law that would revive tax breaks that ended in 2014, extending some for two to five years and making others permanent. In total, this lobbyists’ dream bill could add more than $2 trillion to the national debt over the next two decades, according to the CRFB.

So where were the howls of outrage from fiscally responsible Tea Party senators and congressmen? Didn’t hear any? Neither did I. (Senators Ted Cruz, Rand Paul and Bernie Sanders voted no; Sen. Marco Rubio was absent. All but Sanders are Republicans.)

And if you care about the debt and think your vote counts in 2016, well, think again. The following table, based on estimates from the nonpartisan Tax Foundation, shows how leading presidential candidates’ tax and spending plans would impact the debt. (The CRFB has similar estimates.)

Candidate Plan’s estimated addition to, or subtraction from, the national debt ($ billion)
Donald Trump $11,980
Marco Rubio $6,055
Ben Carson $5,617
Ted Cruz $3,666
Jeb Bush $3,665
Rand Paul $1,797
Hillary Clinton -$498
Bernie Sanders -$13,574

All estimates are “static,” and exclude any projected revenue growth that may result from tax cuts.
Does not include Govs. Chris Christie or John Kasich, whose tax plans haven’t been “scored” by major groups.
Sen. Sanders’ estimate is for his tax plan only; does not include impact of various spending plans.
Source: Tax Foundation
The most fiscally irresponsible plan is the one proposed by Donald Trump, whose highly regressive tax cuts for the wealthy and others could add $12 trillion to our debt burden.

The runners-up are Rubio and Ben Carson, whose respective calls for the elimination of capital-gains taxes and a 10%-15% flat tax, among other tax cuts, would each tack on around $6 trillion to the debt.

(Sanders’ huge tax increases worth $13.6 trillion would likely be more than offset by his spending plans for single-payer national health care and free college for all — and maybe a Mercedes in every driveway?)

The most fiscally responsible major candidate appears to be Clinton, whose tax plan would subtract roughly $500 billion from the debt, at least on paper.

Here’s the deal, folks: Democrats’ belief that spending is “investment” and Republicans’ blind faith in unpaid-for tax cuts as an engine of economic growth (The Economist calls Republican candidates’ tax-cut plans “jaw-droppingly expensive”) have gotten us into a deep fiscal hole.

And nobody running for president this year has the faintest idea of how to dig us out, or even wants to try.

Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers exclusive market commentary and simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold.



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They don't care because they know it's way past saving. They simply refuse to recognize that it exists or avoid speaking about it. We're totally fucked and they all know it