Economists slam Trump and Harris over unanswered questions about budget deficits

Economists told Fox News Digital that the economic proposals put forth by former President Donald Trump and Vice President Kamala Harris would further widen the nation's already ballooning budget deficit, with both candidates calling for fiscal responsibility. He pointed out that he did not seem particularly concerned.

Neither Trump nor Harris have announced a dedicated policy plan to address the nation's budget deficit. The word “deficit” appears only once in President Trump's 16-point policy plan on his website.

Meanwhile, Harris' economic platform repeatedly mentions the deficit and says she is “committed” to fiscal responsibility, but only suggests raising taxes on the wealthy and corporations as a solution.

“The reason neither candidate is seriously talking about fiscal responsibility is probably because neither candidate is fiscally responsible,” said Erica York, senior economist at the Tax Foundation. “With neither of them providing many details, questions remain about how Harris' spending policy will stack up. Will Trump really eliminate all green energy tax credits? Will he? Will they really impose all the tariffs they promised?”

Asked what Ms. York's message was to Mr. Trump and Ms. Harris about the deficit, she said, “Think about it seriously.”

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“We face several challenges in terms of fiscal policy, from debt and deficits to the need to compete with China to the need to encourage entrepreneurship and work, but the tax policy currently outlined None of these visions come close to providing answers or addressing those challenges,'' York said.

Kimberly Clausing, an economist at the Peterson Institute for International Economics, echoed York's concerns, adding, “I don't think there's been enough focus on the deficit in this campaign.”

“I don't know whether to blame the candidates or the concentration of the American people,” Clausing said. “Candidates have an incentive to try to respond to what the public wants to hear, but there doesn't seem to be much support for fiscal responsibility. The problem was much more pronounced.

According to the Bipartisan Policy Center's Deficit Tracker, the government has an accumulated deficit of $1.9 trillion through fiscal year 2024.

Meanwhile, revenue grew 11% over the last month. The increase in revenue was primarily due to increases in personal and corporate taxes, higher interest rates and a 20% decline in personal income tax refunds, the deficit-tracking group said. Trump's economic proposals include extending tax cuts, lowering the corporate tax rate and exempting tips, overtime pay and Social Security benefits from taxable income. Despite his plan to generate revenue through the repeal of tariffs and green energy tax credits, economists say it won't be enough to offset revenue lost from Trump's tax cuts and other economic proposals. are.

A study by the Tax Foundation, a tax policy nonprofit in the nation's capital, estimates that the Trump administration's deficit impact will increase by about $4 trillion over 10 years.

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But according to Richard Stern, an economist at the Heritage Foundation, the real cause of ballooning deficits is government spending, not tax cuts.

“Tax cuts can increase deficits, but that money goes back to the people who earned it,” Stern said. “Increasing deficits due to increased spending, on the other hand, means the government steals more and suppresses growth even harder.” means,” he said. “Deficits created by tax cuts and spending increases are not the same. Tax cuts grow the economy and reduce the share of deficits in the economy, but increased spending puts pressure on the economy and inhibits growth.”

The Treasury Department is seen in Washington near sunset. (AP Photo/John Elswick, File)

The Biden-Harris administration's fiscal year 2024 budget proposed the highest sustained spending levels in U.S. history, according to Republicans on the House Budget Committee. The committee also noted that the administration's plan to add $82.2 trillion in spending over 10 years is 18% higher than the historical average over the past half-century.

Since becoming the Democratic Party's official presidential nominee, Harris has provided $25,000 housing subsidies to first-generation home buyers, $100 billion in tax credits for manufacturing and small businesses. He has said that he will increase tax credits tenfold. He also offered support for expanding the child tax credit, as well as increasing government spending to support families' child care needs, among other proposals.

All told, the Tax Foundation calculated that Harris' budget deficit would increase by about $1.5 trillion over 10 years.

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Among the downstream effects of rising deficits are higher interest rates and a decline in a country's creditworthiness, which could be problematic at a time of heightened global tensions, Clausing said. be.

“When new crises come along, whether it's a pandemic, a national security crisis, a major recession, sometimes they're caused by things that are beyond our control. You know. As you can see, this type of crisis is very difficult to respond to if you don't have the fiscal space to do so.'' Mr Clothing said. “If you start by maxing out your credit cards, it becomes a little harder to respond to emergencies like this.”

Currently, China and Japan are the two largest foreign creditors of the United States.

Former President Trump and Vice President Kamala Harris (Getty Images)

The Harris campaign declined to comment when contacted by FOX News Digital.

The vice president received endorsements this week from more than 400 left-leaning economists and former policy makers who served in Democratic administrations. Additionally, New York Times financial columnist Andrew Ross Sorkin argued this week that Harris could come much closer to balancing the national budget than Trump.

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As for voters, they typically tell pollsters that they have more confidence in Trump than Harris on the economy, but there have been recent reports that Harris is regaining some of that support. is shown. Trump's lead over Harris on the economy is just 5 points in a recent Fox News poll and just 2 points in an AP/NORC poll.

“Dangerous liberal Kamala Harris’ budget proposal would increase the national debt by $17 trillion by 2034 and also include record tax increases of $4.9 trillion, the largest in history. “This will cost every American household nearly $40,000 a year on top of the costs of high inflation,” Trump campaign press secretary Caroline Levitt told Fox News Digital. “Families are already struggling to afford gas and groceries thanks to Kamalanomics, and President Trump continues to emphasize how Harris' budget will exacerbate these hardships for hardworking Americans.” I will continue to do so.”

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