One would think that balancing a budget would be a pretty simple task for someone who has attained great wealth as a result of their superior business practices. That might be the case for most people, but it doesn’t seem to be true for President Trump.
Trump’s budget proposal has received a lot of criticism since it was first introduced a couple of months ago, from the number of public programs it proposes cutting to the massive increase in military spending. New York Magazine recently found another massive problem with Trump’s budget, a discrepancy that everyone should be on board with correcting as soon as possible.
Trump’s budget is balanced out, in theory, by a $2 trillion increase in revenue that will be the result of the tax cuts the president has proposed. The problem, though, is that Trump and his staff are expecting the gains without accounting for the $2 trillion losses that will also result from reduced tax rates.
New York Magazine offered up two possible explanations for the giant error.
‘The budget assumes $2 trillion in higher revenue from growth in order to achieve balance after ten years. So the $2 trillion from higher growth is a double-count. It pays for the Trump cuts, and then it pays again for balancing the budget.’
‘Or, alternatively, Trump could be assuming that his tax cuts will not only pay for themselves but generate $2 trillion in higher revenue. But Trump has not claimed his tax cuts will recoup more than 100 percent of their lost revenue, so it’s simply an embarrassing mistake.’
On Tuesday morning, Treasury Secretary Steve Mnuchin tried to brush aside the double-counting error. However, the great explanation he came up with was that the budget “is a preliminary document that will be refined.”
Harwood asks Mnuchin about double-counting gimmick: "This is a preliminary document that will be refined" #FiscalSummit
— David Wessel (@davidmwessel) May 23, 2017
That’s not exactly the most reassuring response, and several economic experts chimed in on the matter in interview with The Washington Post.
Seth Hanlon, a former Obama economic adviser who now works with the Center for American Progress, said about the “preliminary document”:
‘On the one hand, they’re saying it is not fully formed. On the other hand, they’re saying it will boost the economy by more than any mainstream economist would say is at the outer limit of what’s possible.’
Alan Cole, an economist at the Tax Foundation, added:
‘They have more tax revenue in this budget than the [Congressional Budget Office] has in its baseline. They have a greater amount of taxes collected. And that is — quite something.’
Jason Furman, senior fellow at the Peterson Institute for International Economics and former chairman of the Council of Economic Advisers, also said that the missing $2 trillion is not an “accidental mistake.”
‘This is not an accidental mistake. This is a mistake that happens to people that have a ludicrously optimistic view of the impact of tax cuts and also don’t bother to actually specify or work out any of the policy details.’
“Ludicrously optimistic” seems to be a pretty good summation of Trump’s budget — and of the Trump administration as a whole. Good luck making America great again with a whopping $2 trillion missing from the budget, Mr. President.
Featured image via Jabin Botsford/The Washington Post via Getty Images.