Budget Deficit

Trump Blames Hurricanes for Growing Budget Deficit. Entitlements Are the Real Problem.

Trump blaming the budget deficit on hurricanes is much the same as those on the left who are trying to pin the blame on last year's corporate tax cuts.

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NASA/Sipa USA/Newscom

In response to questions about America's growing budget deficit, President Donald Trump on Wednesday said natural disasters were partially to blame.

After first identifying (somewhat correctly) increased levels of spending on the military and domestic programs—"I had no choice but to do it," Trump said of those spending hikes—as culprits of the widening budget deficit, Trump quickly pivoted to suggest that the deficit was being driven by acts of God.

"We also have tremendous numbers with regard to hurricanes and fires and the tremendous forest fires all over," Trump said. "We had very big numbers, unexpectedly big numbers."

Trump and his fellow Republicans are facing some heat this week after the Treasury Department announced on Monday that the budget deficit had grown by 17 percent during fiscal year 2018—which ended on September 30. At $790 billion, the deficit for fiscal year 2018 was the highest since 2012.

It's true that natural disasters can put big dents in the federal budget. Last year, Congress spent $140 billion in emergency funding to cover the costs of Hurricanes Harvey, Irma, and Maria after they devastated parts of Texas, Florida, and Puerto Rico. Congress is currently considering an emergency funding bill to cover the damage caused by Hurricane Michael, which slammed into the Florida Panhandle last week. It is unclear what the final cost of that bill may be.

Making matters worse is the fact that Congress has never been particularly serious about prioritizing emergency disaster funding by offsetting those costs with other spending cuts. Even in the halcyon days when Republicans cared enough about limiting federal spending to pass the Budget Control Act of 2011, there was a special loophole allowing emergency disaster spending that did not count against the budget cap.

So, yes, Congress often adds to the deficit when it passes emergency spending bills in the wake of natural disasters. But all that is somewhat beside the point, because it's not tropical storms that have put America on a trajectory to have a $1 trillion deficit by the end of next year. The deficit is being driven by entitlements. Social Security and Medicare are on pace to run a $100 trillion deficit over the next 30 years, according to Congressional Budget Office projections, while the rest of the government is projected to operate with a surplus.

This is an important distinction. If the rising deficit in 2018 were able to be blamed on rare events like a series of particularly bad storms or forest fires, then it would call for a different course of action than if the deficit is being driven by baked-in costs connected to entitlement programs that will only get more expensive as some 74 million Baby Boomers head into retirement. As Brian Riedl, a senior fellow with the Manhattan Institute and longtime congressional budget aide pointed out in an interview with Reason published earlier today, the $1 trillion deficit America faced after the Great Recession was an entirely different matter than the nearly $1 trillion deficit facing the country today:

The last time we had a trillion-dollar deficit, it was entirely the result of the Great Recession, and when the recession ended and we had some small policy changes, the deficit somewhat fixed itself. The danger is that the fixing of that trillion-dollar deficit from 2009 has created a false sense of security. People say 'well, we had a trillion-dollar deficit in 2009 and the sky didn't fall.'

The difference is: that trillion-dollar deficit was a temporary result of the recession and fixed itself when the recession ended, but this trillion-dollar deficit is caused by 74 million retiring Baby Boomers. It's not going to fix itself. So while deficit hawks might sound like the Boy Who Cried Wolf after 2009, it's a totally different situation now.

Senate Majority Leader Mitch McConnell (R-Ky.) seems to understand this, even if Trump does not. In an interview with Bloomberg, McConnell said the current deficit level was "disappointing" and the result of bipartisan unwillingness to address entitlement spending.

That's also why it's probably right to be skeptical about Trump's headline-making request on Wednesday that all cabinet secretaries come up with a plan to cut 5 percent from their budgets.

Plans to slash spending are always welcome, of course, but Trump called for similar cuts in his budget plan for this year, only to have Congress ignore those plans and hike spending anyway. Spending hikes that Trump signed into law—and, in the case of the additional $82 billion in funding for the military, spending increases that he bragged about accomplishing. Seemingly every Trump rally also includes presidential promises to protect Social Security and Medicare from changes.

Trump blaming the budget deficit on hurricanes is much the same as those on the left who are trying to pin the blame on last year's corporate tax cuts. Both are correct, to a point, in that emergency spending and tax cuts without offsetting spending reductions will widen the gap between how much money the government takes in and how much it spends. Both explanations ignore the real problem—one that is far more expensive and politically difficult to solve.

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  1. “McConnell said the current deficit level was “disappointing” and the result of bipartisan unwillingness to address entitlement spending.”

    What he implies is that even though Republicans control every branch of government, they won’t cut entitlements. They won’t touch them until Democrats can take some of the blame. And by some I mean all. Anyone who’s been paying attention to fiscal politics for any part of the last few decades knows this, and he just pretty much admitted it.

    I don’t know what to make of Mitch’s recent musing that “I’m a cynical, hypocritical coot and so is our entire party–I will seat a child molester if it means winning–and I don’t care who knows it.” Refreshingly honest, or a disturbing peek into his dark void of a soul?

    1. You put quotation marks on what you imagine?

      1. “I think it’s pretty safe to say that entitlement changes, which is the real driver of the debt by any objective standard, may well be difficult if not impossible to achieve when you have unified government.”

        Why not? Because Republicans are cowards?

        1. But Tony, you should love big spender Republicans since deficits don’t matter to you.

          1. And what’s your excuse?

            1. That socialists like the ones you idolize and vote for can block any cuts? I know you’re an idiot, but do you have to try so hard to prove it? If even a fraction of your fascist party were to agree to entitlement cuts they could happen. But then how would they continue to buy votes with someone else’s money?

    2. What is this? A Tony comment that’s not objectively and entirely wrong? Sure, there’s that bitter belief in the two-party death cult that requires him to lash out at Republicans as the cause of all things bad and that’s probably what motivated it but he’s not entirely wrong. Republicans control all three branches of government and still can’t stop the deficit. The Democratic party is married to the idea of “tax and spend”, which is stupid, but somehow almost seems reasonable compared to the Republican “no tax, only spend” zeitgeist.

      That’s not to say I think anyone should consider voting democratic for more than the 0.001 seconds it takes to realize that their economic policies, while perhaps not AS bat shit insane as Republicans, are still laughably wrong. The degree of wrongness doesn’t matter. It’s still wrong.

      I think it should be clear to anyone that the deficit isn’t going to go down until spending is reduced. If you want out of a hole the first step is to stop digging. Unfortunately, thanks to the wonders of democracy and the ability of a majority of the public to (effectively through their elected representatives) vote themselves a free lunch that they cannot afford that will never happen and the country will definitely go full Greece within thirty years.

      1. Where? Surely you don’t mean this one, because entitlements are mandatory spending and require passing new legislation which team blue will oppose with at least 99% of their membership. Now if you want to beat team red up when they have a 60 seat majority in the senate, then he might have a point.

        And their policies are far more batshit insane than team red. They gave us the entitlement state to begin with, and it isn’t “tax and spend,” it’s “tax and spend even more.”

    3. Entitlements – and the Republican unwillingness to rein them in – is not the root problem. To get to that, we have to first ask,

      Where did the entitlement programs come from?

      DemonCraps.

      And who are the DemonCraps?

      Mostly women.

      And when did entitlements begin to explode?

      When women got the vote.

      In fact, John Lott makes a pretty strong case that the immense size and expense of our government today can be laid squarely at the feet of female voters.
      http://www.people.fas.harvard……tKenny.pdf

      Men built America. Women were mostly along for the ride.
      Now women are destroying America… one entitlement program at a time.
      The Nineteenth Amendment was the biggest legislative mistake in all of known space-time.

      One final question:

      How do we fix the problem?

      Repeal the 19th Amendment and forbid women the vote.

  2. Let’s say Republicans cut spending across the board. Ok, so now no Republicans are in office and Democrats pass even higher spending than before.

    Face it, this is the death spiral of the Republic. The only hope is that liberals embrace small government, which of course is not going to happen until maybe hyperinflation kicks in.

    1. The only hope is that liberals embrace small government

      Why in the fucking hell won’t conservatives embrace small government?

      1. The modern conservative is a social conservative. Economic conservatism is dead and Donald Trump wears its skin like a suit.

        1. Just like the modern libertarian is a progressive who opposes the minimum wage and can’t wait for the UBI.

    2. If the German experience is any guide, after the hyperinflation, the left will blame the Jews and when they get in power, start sending those of us who object to re-education camp, from which none shall return. Tony, I’m sure will be running the trains.

      1. Meh. I’m fine with blaming it all on the Jews, not that’d it’d actually be all their fault or anything. But everybody needs a good scapegoat now and again! But NOT particularly down for little Maoist uniforms, or having all my personal property confiscated.

    3. While I’m certainly no fan of the Democraps, “Republicant” presidents hold 2 of the top 3 spots for largest budget deficits (Reagan & GW Bush).
      While Obama leads the group, at least he had to account for the Great Recession (aka the Second Great Depression).
      GHW Bush takes the forth spot.

      So, 3 of the top 4 budget deficits came from “conservatives”. Herr Trump will maintain that percentage, perhaps even topping D’ohbama

      This goes way beyond a simplistic “liberal” vs “conservative” argument.

      The U.S. has become a cash cow. As such, everyone is seeking special interest legislation, looking for a piece of that action….much like the Mob.

      You should consider reading the book “A Republic No More” by Jay Cost for more info on this.

      Interestingly, “Democrap” or “Republicant”, the same ultra-wealthy keep getting wealthier, the same ultra-powerful gain ever more power.
      Meanwhile, the rest of us continue to lose pace to highly-underreported inflation, as we continue to lose ever more rights, freedoms, liberties, and justice.

      With over $110 BILLION in corporate welfare every year, the WTID wealth inequality index is at it’s highest level in U.S. history…surpassing that of 1927-1928…just before the first Great Depression.
      Coincidence?

      Budget deficits don’t happen in truly good economies.
      Neither do extremely large “tariffs” (aka, veiled taxes).
      Neither does 102 MILLION still unemployed Americans (as per the BLS).

    4. What actually happened was:

      Republican G. Bush raised spending to unprecedented levels for TARP, to save the big banks and the financial house of cards from collapsing.

      Democrat B. Obama took the emergency spending level as the new baseline.

      Republican D. Trump spent even more.

      I’m seeing a pattern here.

      1. That what goes up… Must never come down?

        Yeah, that’s a thing. 🙁

    5. Well, a civil war where the conservatives (those with most of the guns and military experience) slaughter the libtards (those who favor the social welfare spending) would also solve the problem. And face it – it’s more realistic than teaching liberals.

  3. Hurricanes.

    And sharks, don’t forget sharks.

    Hundreds of them are coming ashore in the sharkicanes and causing tremendous destruction. Tremendous destruction.

  4. Science has proven that hurricanes are caused by that stuff that comes out of the tailpipe of all those Priuses out there. History has proven that the internal combustion engine has created more wealth for more people than any other single invention leading these evil baby boomers to live well beyond their productive years. Clearly the answer is a ginormous carbon tax. Less carbon equals no more hurricanes and the resulting poverty will lead to people dropping dead at 45 like god intended. In 30 years we’ll have surpluses so huge we’ll all be billionaires!

  5. Good luck on cutting spending!

    Every dollar spent is somebody’s income. In fact multiple somebodies. The well-connected crony who owns a construction biz gets a huge amount and spends some on a sports car made of hookers and cocaine, the car dealer spends what he just got on tiny sex-trained horses, the horse trainer uses his piece to fund his experiments in creating evil, sentient, strawberries and so forth.

    And together all those people have more political pull than you. Every dollar is attached to a constituent. And there are A LOT of constituents. And based on the electoral results for Libertarianism several orders of magnitude more than vote for Libertarian politicians.

    You can’t win by being the “cut spending” guys.

    1. The thing is, if congress ever had any balls, they could simply gut a massive portion of the budget in a single year… And NOBODY outside those special interests would notice. All that money would be spent more productively in the private sector, creating useful jobs for all the same paper pushers and useless tools.

      There are things people will notice and care about being cut. Hence bitch about being cut… Then there are the studies on gay gerbil masturbation habits, or whatever useless crap one reads about. Many entire agencies fall into that category. You slash some useless agency by 75%, and nobody that doesn’t work for that agency will ever notice or care.

      THAT kind of stuff is the discretionary spending that will not be missed. Obviously we need to fix entitlements too, but there are many hundreds of billions to be trimmed from completely useless stuff too.

      1. The problem is that almost all of us have at least one special interest or pet issue that we DEMAND government support for.

        What do you think would happen among all the proud anti-gov pickup drivers if we banned tax dollar support for stadiums, and revoked all the tax-exempt status for the NFL, etc.?

      2. Actually, entitlements pretty much dwarf all the spending you’re talking about. If we were serious about balancing the budget and retiring the debt, we’d cut the military by half and social welfare by half and then we’d have a chance.

    2. The thing is, if congress ever had any balls, they could simply gut a massive portion of the budget in a single year… And NOBODY outside those special interests would notice. All that money would be spent more productively in the private sector, creating useful jobs for all the same paper pushers and useless tools.

      There are things people will notice and care about being cut. Hence bitch about being cut… Then there are the studies on gay gerbil masturbation habits, or whatever useless crap one reads about. Many entire agencies fall into that category. You slash some useless agency by 75%, and nobody that doesn’t work for that agency will ever notice or care.

      THAT kind of stuff is the discretionary spending that will not be missed. Obviously we need to fix entitlements too, but there are many hundreds of billions to be trimmed from completely useless stuff too.

  6. I thought we were all agreed that the government doesn’t spend money, it “invests” money? And who knows more about investing money than Donald Trump? Well, investing other people’s money, at least.

    Relatedly, I had my doubts he was actually a Republican, but seeing him studiously and oh-so-earnestly advocating budget cuts just prior to an election and just after signing a bloated budget package convinces me that, yep, he’s a Republican alright. Just let me finish off this fifth and I’ll be ready to give you a lecture on the evils of the demon rum.

    1. I’m sorry, did you mean “investing” or losing other people’s money?

  7. “We also have tremendous numbers with regard to hurricanes and fires and the tremendous forest fires all over,” Trump said.”

    The local news has him being a poopyhead for suggesting CA can cover it’s own wild-fire costs.
    Well, the CA government pretty much legislated those fires into existence, and now wants the rest of you guys to cover what ‘the party of science’ has done out here:
    https://www.youtube.com/watch?v=ajPpP3vbD5c&t=2s

  8. Here are the facts about spending, for FY2018 which just ended. (These are not the final numbers…spending surely will end up being higher(

    http://mil14.com

    14% for Defense
    70% for Social Services

    1. Either way the profits mainly go to the same firms/people…..the .001 percent.

      Vanguard, BlackRock, State Street (the “Big Three”), along with other firms like JP Morgan, Fidelity, Invesco, Morgan Stanley, and other of the largest money-management firms are the largest owners of the largest “competing” corporations in most every single industry…..including health care, insurance, phramaceutical, energy/utilities, defense, tech, telecom, automotive, manufacturing, etc….

      Vanguard, BlackRock, State Street and JP Morgan are some of the largest true beneficiaries of both military and welfare spending (via their held defense contractors, including tech, EBT administration, and other military/defense/intelligence/social services operations).
      Walmart is one of the largest beneficiaries of food stamps (and is largely owned by these same firms). Ditto for Coca-Cola and PepsiCo.

      The same firms that profited the most of the ACA, via their hospitals, insurance and pharmaceutical co’s, have also profited the most off Trump’s “zero-tolerance” immigration policies, via private prison companies like the Geo Group and CoreCivic.
      Not to mention profits off the new permanent war economy from their held corporate assets like Boeing, Lockheed Martin, GE, General Dynamics, Raytheon, etc.

      They own the politicians, from both the “left” and “right”, they control the U.S. government, and the new American Planned Market Economy.

      1. jello.beyonce|10.18.18 @ 12:17AM|#
        “Either way the profits mainly go to the same firms/people…..the .001 percent….”

        Fucking lefty ignoramus alert!
        And doesn’t this piece of shit look just great in green?

    2. What were the costs of social services related to defense? The VA is huge, right?

      1. Vet Benefits = 175 billion
        Defense spending 575 billion

        Click here for details:
        http://mil14.com

        Oh, by the way, Social Services has now reached 3,000 Billion per year.

  9. Entitlements go beyond SS and Medicare.

    U.S. spending on corporate welfare is now topping $110 BILLION yearly.
    Amazon, the first trillion dollar company, since 2000, has received $1.115 billion in the U.S., rocketing past the previous leader in this category: Walmart.

    ? Nike has taken in more than $2 billion in government monies.
    ? Shell Oil has received $2.04 billion.
    ? The government has ponied more than $2 billion to the Italian-based Chrysler Fiat.
    ? Ford Motor Company has received $2.52 billion in government funding lately.
    ? General Motors has received over $3.58 billion in subsidies.
    ? Intel is also on the receiving end, with totals reaching $3.87 billion.

    The list goes on, and on, and on….

    Yep, “private”, for-profit companies receiving government handouts.

    Interestingly, most of these companies are owned by many of the same largest institutional shareholders.

    Vanguard, State Street, BlackRock, JP Morgan, Invesco, Fidelity, FMR, and other of the largest money-management firms, whom operate collaboratively with one another, forming virtual monopolies amongst the largest “competing” corporations in most every single industry.

    Corporations owned by these firms are among the largest spenders of lobbying activities of U.S. governments.
    Corporations owned by these firms are also among the largest spenders on political campaigns, of candidates on both the “left” and “right”.

    Their campaign contributions and lobbying return an extremely healthy ROI.

    1. jello.beyonce|10.17.18 @ 11:36PM|#
      “Entitlements go beyond SS and Medicare.
      U.S. spending on corporate welfare is now topping $110 BILLION yearly.”
      Amazon, the first trillion dollar company, since 2000, has received $1.115 billion in the U.S., rocketing past the previous leader in this category: Walmart.”

      Calling bullshit.
      Cite or STFU. And, no bullshit about how Amazon shipped at the going USPS rate; tell us how Amazon “received $1.115 billion in the U.S.”

      1. The lizard people told him so..

      2. Even if true, $110 billion for corporate support is only 2.6 % of the Federal budget, and is dwarfed by social spending by a factor of almost 30. And companies actually make shit and do shit that most people want.

      3. The term “entitlements” is being misused.

        Social Security and Medicare are not true entitlements because these funds are paid into by the ultimate recipients during their productive years. The problems with both are twofold: (1) they are compulsory instead of voluntary options, and (2) the contributions are not sufficient to keep up with projected payouts (in other words, the typical problem with any Ponzi scheme). And of course there is the fact that Congress has effectively gutted both the trust funds by making them part of the general budget, which means Congress gets to raid them every year and then debate whether to pay off the previous year’s ill-gotten gains. That said ?.

        Other programs like food stamps, welfare generally, etc., are truly entitlement programs because the recipients do nothing to contribute to their funding. These would be where cuts could be economically justified but won’t happen simply because nobody wants to take the heat for cutting programs that are “for the people”. We have, in essence, created problems that plague us and cannot be solved

        1. Don’t forget that, with each change in taxation, the floor of who owes taxes rises.
          Meaning fewer people carry the tax burden.
          Once that number becomes less than 50%, and the rest still get to vote on who the spenders are, the death-spiral is inevitable.
          The only solution is to deny the franchise to anyone, whose income depends on government payments.
          It is the ultimate conflict of interest for those, who live off the taxpayer’s dollars, to get to choose who decides how much they will receive.

  10. But hurricanes are good for the economy, according to a Nobel Prize winning economist.

  11. Trump blaming the budget deficit on hurricanes is much the same as those on the left who are trying to pin the blame on last year’s corporate tax cuts.

    Well at least you’re honest about the writers here now.

  12. Sadly what is seen by many as “a good economy” is simply an illusion build of massive deficit spending. While we fixate on an improving GDP the national debt is not just growing but it is exploding. An under-reported and unnoticed report was issued last week by the Office of Management and Budget which is required to from time to time review and update the U.S. federal budget. The report titled the “Mid-Session Review” paints a far bleaker forecast of the deficit going forward than originally predicted.

    James Grant and Jim Chanos recently participated in a talk at the New York Historical Society, both men make it perfectly clear they see what is being cast upon us is a giant fraud. We should be dubious of those making promises this will end well. The article below delves into the bleak deficit numbers now being predicted.

    http://brucewilds.blogspot.com…..-cast.html

  13. oh, lookee, more young whippersnappers wanting to cut the pensions of senior citizens who paid into entitlement fundings their entire working lives…hey, I got an ideer–why don’t you young punks go fukk yourselves? How do ya like THEM apples?

  14. Name any problem, and for some class of commenters, it will never be the real problem. Among that class, entitlements will always be the real problem.

  15. If you loan me $100, I owe you repayment. You are entitled to that repayment, and it’s not a dirty word. It’s one of the most basic rules of a free market — you pay what you owe and are paid what you are owed. No market can survive if nobody ever has to repay their debts.

    Social Security isn’t a handout or welfare, it’s a loan that is coming due. For decades, those 74 million baby boomers have been paying a lot of money into a fund that was supposed to work like a long-term savings bond. The money was supposed to be invested and saved for the day it was time to pay out. But Congress decided that they should be able to treat that special fund as part of the general treasury, and ‘borrowed’ from it. For decades, they’ve treated it like another tax revenue stream, ‘borrowing’ from the fund over and over, never paying even a penny back.

    And now that series of loans they gave themselves is about to come due. Those baby boomers had their money taken by the federal government whether they wanted to pay it or not, on the promise that it would be paid back at retirement age. If the government is able to force people to engage in a ponzi scheme, why should any lesser loan be paid back?

  16. I will concede that social security and medicare should never have been. I will also concede that alot of these social programs are probably better handled by private enities, but lets face some real facts. If the Federal government hadn’t robbed Social Security and Medicare blind and left it with a couple of trillion dollars of worthless IOUs it wouldn’t be in crisis at the present. If all Teachers, railroad employees and government employees paid into social security instead of getting these sweetheart pensions that by the way us dumbass social security recipients paid for maybe there never would be a crisis. Or just maybe if our government didn’t keep us in endless conflicts around the world. From there I sit the only ones benefiting is Military contractors while we destory countries and companies like Halliburton that rebuild them all paid for by we the people. I am really sorry to be on my soapbox right now but I am sick and tired of everyone wanting to blame the old and the poor and no one ever pointing finger at the real problem which it are the Banks, the Multinational Corporation and the corrupt politicians that do their bidding. And if you can’t see that you need to get in another line of work because you are just another enabler. What I am most
    ashamed of is that with a Government that has a 30% approval rating my fellow Americans are going to the polls in November and put the same corrupt bastards back in office hoping things will change.

    1. Despite what you may have been told, those “sweetheart” pensions of “all Teachers, railroad employees and government employees” aren’t paid for by “dumbass social security recipients”, any more than are their salaries.
      The portion that their employer, even if it is the government, puts into their pension systems is just as much part of their total compensation package as is any other benefit, like medical insurance, vacation or sick pay.
      That money, plus what the employee contributes, unlike SS, is invested and that, plus the returns, pay for the pensions. No other government money goes to retired pensioners.
      They may not contribute to SS, but they also don’t collect it upon retirement.
      The only taxpayer dollars going to pensioners is because private companies didn’t keep their pension systems funded and, when they went out of business, there wasn’t enough to make good on their promises. Only a very few government pension systems have been in that situation and it is because they spent the money on vote-buying, rather than funding the systems they had a responsibility to.

  17. So the solution is to steal from 74 million retiring Baby Boomers creating an ex post facto tax on them to protect tax cuts??? Explain to me how theft, ex post facto laws and taxes is libertarian again?

    Entitlements are called that because you directly pay into them so are entitled to them.
    It may have started out as a scam, you pay for them, they pay for you, but with the numbers who die before collecting we should’ve been over that problem with the scam decades ago and it should be run as a forced individual retirement plan.
    That could’ve been done at any point. It could’ve been phased out at any point with no more FICA taken. Waiting until you have to steal from people is not the time or the way.

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