Tag: national debt
President Trump

Tariff Dividend Checks For Dummies (Who Run America's Policy Debates)

I learned basic arithmetic skills in third grade. I wasn’t exceptional, everyone in my public school third grade class learned them. Of course, we all can now use computers to have calculations done for us in a fraction of a second. But still somehow, we have major national debates that show zero understanding of even the most basic arithmetic.

The latest example is the $2,000 tariff dividend check that Trump is promising us. The arithmetic here is about as simple as it gets. We have roughly 340 million people in the country. Let’s say 10 percent don’t get the check because they meet Trump’s category of “high-income.”

That leaves over 300 million people getting Trump’s $2,000 checks. That comes to more than $600 billion. Trump’s tariffs are raising around $270 billion. That means we will be paying out $330 billion more in Trump tariff dividend checks than he is raising in tariff revenue. That is adding $330 billion to the deficit. That is from the same guy who is making an obsession of paying down our national debt.

And just to be clear, we were already looking at a budget deficit for 2026 of $1.8 trillion. If we add $330 billion, the deficit for the fiscal year will be $2.1 trillion. To put this in simple language that even a reporter for a major national news outlet can understand, Trump is proposing to add $2.1 trillion to the debt in 2026, he is not paying it down.

I acknowledge not being a deficit hawk and am not terrified by a deficit of this size, which is roughly seven percent of GDP. But I suspect most of the politicians in Washington are, and certainly anyone who thinks we need to be paying down the debt should be screaming bloody murder.

But watching the reaction in major media outlets, there seems almost no appreciation of the fact that Trump was floating what would ordinarily be considered a very large increase in the deficit. In fact, if Trump were to give this tariff dividend check every year over the next decade, it would add close to $4 trillion to the debt (counting interest payments), almost as much as the big tax cut Congress approved earlier this year.

It’s also worth comparing Trump’s tariff dividends to other items in the news. The government shutdown was in large part over the $35 billion in annual payments for enhanced subsidies for people buying insurance in Obamacare exchanges. Trump and Republicans in Congress claimed that we didn’t have the money to pay for these subsidies. Trump’s tariff dividend checks would cost more than 17 times as much as the enhanced insurance subsidies.

To make another comparison, Trump saved us around $6 billion a year by shutting down PEPFAR, the program that has saved tens of millions of lives by treating people in Africa for AIDS. This means that Trump’s tariff dividend checks will cost us 100 times as much as the AIDS program that he said we couldn’t afford.

And just to throw in one more comparison, the annual appropriation for public broadcasting was $550 million. Trump’s tariff dividend checks would cost more than 1000 times as much as the government’s payments for public broadcasting.

People can differ in their views on how important it is to save lives in Africa or provide people here with healthcare. They may also differ in their assessments of how important deficits are, but it really would be good if media outlets could make knowledge of third grade arithmetic a job requirement for reporters who deal with budget issues. It should be their job to provide meaningful information to the public on the topic. Letting someone talk about $2,000 dividend checks, and also about paying down the debt, is a sick joke.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.

Reprinted with permission from Dean Baker.

Trump rally, Tulsa

Suddenly, MAGA Is Feeling Doubt About Trump's 'Big Beautiful Bill'

With House Republicans narrowly passing President Donald Trump’s One Big Beautiful Bill Act—which is designed to blow up the national debt, cut taxes for the rich, and partially pay for that by gutting programs for the poor and working class—you’d think MAGA conservatives would be cheering. But many of them aren’t.

Let’s back up.

Trump defied historic voting patterns in 2024 by winning voters making under $50,000 a year, 50 percent to Democratic nominee Kamala Harris’ 48 percent. He tied her among voters making over $50,000, at 49 percent. And when the threshold was raised to $100,000, the income divide got starker: Trump won the under-$100K crowd, 51 to 47 percent, while Harris won the over-$100K vote, 51 to 47 percent.

That flipped the old partisan narrative. In general, Republicans were the party of the working class, and Democrats the party of those with more money.

While culture-war hysteria around transgender people and immigrants drove much of Trump’s support, his promise to lower prices “on Day 1” clearly resonated with economically desperate voters. Exit polls back this up. He won 76 percent of those who had faced “severe hardship” from inflation in the previous year, and 52 percent of those who’d faced “moderate hardship.” Meanwhile, Harris dominated among those who said they’d faced “no hardship,” winning 78 percent of them.

As former Daily Kos reporter Kerry Eleveld once said in our old podcast, “Democrats are the party of voters who don’t have to look at prices when grocery shopping.”

That’s why we see so many variations of “this isn’t what we voted for” in all these “Leopards Ate Faces” stories. Yes, we could scream, “IT WAS ALL THERE IN PROJECT 2025!” But let’s be honest: Most voters aren’t policy wonks. For those doing price math in the grocery aisle, politics isn’t a priority. Trump’s promise may have been absurd, but it was simple and seductive.

But falling for those lies has a cost. On the economic front, Trump and the Republican Party are governing like they always have—for the ultrawealthy, connected, and powerful, at the direct expense of their own voters. As I’ve written repeatedly, it’s like Trump is trying to hurt his base.

Early Thursday morning, House Republicans voted to gut Medicaid, which disproportionately helps rural Americans. Their tax cuts for billionaires effectively raise taxes on low-income voters—i.e., their core voters in last year’s election. MarketWatch, reporting on a University of Pennsylvania analysis of a close-to-final draft of the GOP tax bill, noted:

  • The top 0.1 percent of households would rake in over $390,000 in after-tax income.
  • The top 1 percent would gain $44,190.
  • Households making $51,000 to $92,999 a year would get an additional $815.
  • The lowest-income households, though, will see their after-tax income shrink by $940.

Yes, that voter making under $50,000, they get to deal with Trump’s price-raising tariffs and a tax hike.

On Reddit’s r/conservative subreddit, the reactions to the House passing the bill were surprisingly muted.

Some echoed traditional deficit concerns, such as the commenter who noted, “Conservatives are supposed to want less government spending and less debt. This bill will add trillions of dollars of debt over the next 10 years. We're not even kind of moving in the right direction.”

But a surprising number took umbrage at the gutting of Medicaid and the Supplemental Nutrition Assistance Program, also known as food stamps.

One top commenter the subreddit—i.e., not a troll—wrote, “I'm all for cutting waste fraud and abuse on Medicaid and SNAP, but … I think if the medicaid/SNAP changes go through as is, GOP will get mauled in the mid-terms.”

Another top commenter noted, “[I]t's not that I like high taxes, it's that I think high taxes on the lower, middle, and upper-middle-class are much more damaging than high taxes on the ultra-rich. It's both about keeping taxes low on most people, and about preventing the concentration of wealth in the hands of a tiny number of people. It's also frustrating because Trump has repeatedly spoken out in favor of such tax hikes on the richest taxpayers as a way of making budgets and tax breaks work.”

This commenter also called the Medicaid provisions “cruel,” and on SNAP, they said, “[I]t's going to deny benefits to some people we would probably prefer have them. for example the people who are going to be hit hardest are the people who live in areas where jobs are scarce, who have difficult lives with a lot of barriers to getting anything done, and who have other life responsibilities like caring for family members or doing something else important in their community that they don't get paid for.”

If only there was a party that worked to protect such people …

All over social media, Trump voters are realizing they’re the ones being labeled as “fraud and waste.” Like this gem on Threads:

Again, we can point to Project 2025—the Heritage Foundation’s agenda for a second Trump administration—and note how it promised to gut SNAP and Medicaid. Yes, we warned them. But pointing fingers now isn’t useful.

What is useful? Turning this betrayal into motivation.

No, we won’t win over all Trump voters. Many are too far gone. It’s a cult.

But we don’t need all of them. We don’t even need most. We just need a small shift.

In Pennsylvania, Trump won last year by 120,266 votes. In Michigan, it was 80,103. And in Wisconsin, 29,397. Altogether, that makes for just 229,766 votes in an election where 155,512,532 were cast—or just 0.15 percent of all ballots. That’s how small of a shift we’re talking about, though obviously, the bigger the better.

I can’t recall ever seeing a party so eagerly swing a baseball bat at its own voters—many of them new to the Republican coalition.

The pain is real. And yes, most of us are impacted in some way. But if we can turn that pain into political clarity for even a slice of those voters, we can begin to reverse the damage—and take back our future.

Reprinted with permission from Daily Kos.

Trump Threatens The Stability Of Social Security

Trump Threatens The Stability Of Social Security

Donald Trump's tax and spending plans would add enormous amounts to the national debt, with some estimates as high as $15 trillion over a decade. But some of his tax cuts stand apart in threatening one of America's most revered programs, Social Security. They would essentially bankrupt it by 2031.

This is not some far-off worry. We're talking like six years from now. And the source of this scary news is the reliable and nonpartisan Committee for a Responsible Federal Budget.

How would Trump pull the legs out from under it? Start with his vow to stop taxing Social Security benefits. That sounds nice, but these taxes help fund the program. Add to that his call to exempt taxes for overtime pay and tips, further eating into Social Security payroll tax collections.

Seemingly unrelated stances would also speed up cuts in scheduled benefits. Trump's tariffs would unleash inflation, thus raising the program's cost-of-living adjustment. And his immigration plans would remove workers who pay into the system.

What a lot of people don't understand about Social Security is that there is no magical pile of government money to back up its promises. Social Security is largely self-funding by law. (Medicare is another story.) Social Security must pay for itself. Unlike the Treasury, it's not allowed to borrow.

This is how it works: Social Security payroll tax collections go into a trust fund. Any surplus funds left after benefits are disbursed get invested in special U.S. Treasury securities. These are loans to the federal government. Like other bonds, they collect interest and have to be paid back.

Foes of Social Security have long complained that general revenues are used to make good on these special Treasuries. True, but let us repeat. These securities represent loans to the government, not some new kind of spending. The Treasury must repay this debt just as it must back Treasury bonds held by China, Japan and investors all over the world. (Some on the right make the ludicrous tough-luck claim that the dough is already gone.)

The point here is that monkeying around with the flow of money going into the Social Security program is a way of deep-sixing public support for it. As president, Trump applied the same sneaky tactics in his attempt to kill the Affordable Care Act. Recall how he went repeatedly after its funding.

Shoring up Social Security will be necessary even without Trump's sabotage. The program is still forecast to be unable to meet promised payouts in 2035. But this is fixable with some overdue changes. One obvious step is raising the income level at which payroll taxes are charged. The maximum is now $168,600.

The Heritage Foundation, author of Project 2025, has an alternative plan: reduce benefits. It calls for raising the age, already hiked to 67, for collecting full benefits. So much for Americans worn out from years of hard physical labor.

Heritage also proposes lowering benefits to higher-income retirees. Two problems here. One is that, as noted, benefits to wealthier retirees are already taxed. The other is that reducing the program's value to better-off participants turns what was conceived as an earned benefit into something resembling welfare.

And there's Heritage's perennial plan to privatize the program, that is, expose beneficiaries to the whims of the stock market and other investments. Of course, no one is stopping future retirees from putting their money in stocks, crypto or trading cards. Social Security is best kept dull and simple.

Without changes in how Social Security is currently funded, benefits would be cut 23% by 2035. With Trump's tax plans, benefits would be slashed 33 percent. No two ways about it. Trump is threatening Social Security's stability.

Reprinted with permission from Creators.

The Costs Of War To America -- And Where Our Trillions Really Go

The Costs Of War To America -- And Where Our Trillions Really Go

Reprinted with permission from TomDispatch

As a Navy spouse of 10 years and counting, my life offers an up-close view of our country's priorities when it comes to infrastructure and government spending.

Recently, my husband, a naval officer currently serving with the Department of Energy, spent a week with colleagues touring a former nuclear testing site about 65 miles north of Las Vegas. Between 1951 and 1957, the U.S. conducted more than 1,000 nuclear tests in those 680 square miles of desert and only stopped when scientists began urging that the tests be halted because of soaring cancer rates among the downwind residents of Arizona, Nevada, and Utah.

My spouse's trip was a kind of ritual Department of Energy personnel undertake to learn about nuclear weapons as they maintain our country's vast and still wildly expanding arsenal.

Meanwhile, unable to afford to take time off from my job as a therapist, I found myself once again working double shifts. After all, I was also watching our two young children (ages four and six), shuttling them to appointments and activities along the narrow roads of our rural town, handling a sudden school shutdown due to flooded roads that halted school buses, while working. And mine is really the usual story for so many of the partners of this country's 1.3 million active-duty military personnel when they are sent elsewhere on assignment.

My six year old typically woke me at night to ask whether his dad was shooting at people and started throwing the sort of tantrums that had become uncharacteristic since his father stopped serving months-long deployments on submarines. Once recently, he even conned his already overworked bus driver — our county, one of the richest in the country, has a deficit of such drivers, thanks to the Covid-19 pandemic — into taking him home rather than to his after-school program. He let himself into our house and appeared at my office door to "make sure you haven't left, too."

It was hard to miss the irony of being overstretched at home by poor infrastructure and gaps in care (even as I went into debt to pay for the most affordable childcare center in the area) at a moment when the government was perfectly happy to fund my spouse to tour a mothballed nuclear testing site. His trip came on the heels of two 14-hour days he spent at the Capitol displaying a collection of model warheads to members of Congress. They then chatted with one another and him in a rare bipartisan moment that we as a couple witnessed.

At that time, members of the House of Representatives had yet to even vote on the $1.2 trillion infrastructure bill to fund our country's roads, bridges, buses, and electric grid, which to our relief would pass two weeks later. And when it comes to President Biden's shrinking Build Back Better bill, who knows if it will ever be passed?

It's about time! was all I could think when I heard that the first bill was about to be signed into law. I couldn't help imagining how useful so much of what's packed into both of them would be for people like me — not least of all things in the Build Back Better plan like universal pre-K and some paid family leave, four weeks of which I could have used over the past two months of my husband's military travels and my own late nights. And mind you, as someone with a great job and a relatively high family income, I have it much better than the vast majority of Americans, military or not.

Twenty Years Of War

Meanwhile, as I'm sure you know, Congress has been blindly supporting wars and counter-terror operations in dozens of countries globally from Afghanistan and Iraq to Somalia, Syria, Yemen, and beyond for two decades now. Joe Manchin, Kyrsten Sinema, and other congressional representatives in the House and Senate have been quibbling for months over whether to allow Medicare to negotiate lower prescription drug prices or pay for dental and vision benefits on the premise that such expenditures might add to our high national debt.

Yet they've voted repeatedly and without quibble or question to fund a Pentagon that has run a failing $8 trillion (and counting!) war on terror financed on just such debt. In fact, both of our recent infrastructure bills could have been paid for at their original higher funding levels with money to spare, had we not decided to go to war after 9/11 in a big-time fashion or even stopped the fighting after killing Osama bin Laden in 2011.

Finally — can you hear my sigh of relief? — President Biden actually cited the more than $2 trillion cost of the Afghan War in his defense of his administration's decision to pull out of that country. That the cost of such a failed war wasn't common knowledge, even then, should be (but isn't) notable.

How could that be when "a trillion dollars" for infrastructure work here at home is a commonplace figure in debates everywhere, regardless of which side you're on? How can the cost of that bill be labeled as the "communist takeover of America" by Republican Congresswoman Marjorie Taylor Greene of Georgia and resisted tooth and nail by so many others like her when they say nothing about the costs of war?

The good news is that, whether you know those war figures or not, the difficult legwork of tracking down where those trillions of federal dollars have gone has actually been done and is available to anyone. In 2010, I was one of about two-dozen people — including social scientists, an Iraqi medical doctor, a journalist, and two human-rights lawyers — who started the Costs of War Project at Brown University's Watson Institute for International Studies.

We were nearly a decade into the U.S.-led wars in Afghanistan, Iraq, and Pakistan, initiated in response to the September 11, 2001, attacks by President George W. Bush and being carried on at the time by President Barack Obama. Anthropologist Catherine Lutz, political scientist Neta Crawford, and I were then concerned that Americans weren't paying enough attention to what those wars were costing in lives and dollars.

Nor was the government helping. Costs of War economist Winslow Wheeler found that the Pentagon frequently failed to keep track of the money it spent, while its officials often entered made-up numbers in logs supposedly tracking supplies (like weaponry) to make budgets balance more comfortably and so influence future congressional funding. As we were soon to discover, the Department of Defense routinely failed even to keep track of whom it owed money to, no less how much.

What's more, congressional funding for additional expenses unrelated to overseas wars, while stuffed into the Pentagon base budget, was regularly justified by this thing called "terrorism" that was everywhere (and nowhere) at once. Those terror wars of ours increased that base budget by at least $884 billion from 2001 to 2022.

We relied on all kinds of sources from government watchdog agencies like the Special Inspector General for Afghanistan Reconstruction (SIGAR) to local doctors and journalists in the distant lands our country was disrupting to fill in our gaps in knowledge until we gained a clearer picture of just how much those wars of ours had cost.

Some 10 years after the Costs of War Project's initial launch, the project, now led by Stephanie Savell, Catherine Lutz, and Neta Crawford, is 50-people strong and has tracked so many things, including the more than 929,000 people killed in those wars of ours, almost half of them civilians, and the $8 trillion spent on them. That figure, however, doesn't even include future interest payments on war borrowing, which we have estimated may total $6.5 trillion by the 2050s.

Yep, you got it! The interest alone that this country will fork over for those wars would have undoubtedly been more than enough to fund both infrastructure bills in their original forms.

Spent On America?

But it's all for a good purpose, right? After all, in a Congress in which the two parties are now eternally at each other's throats, the Fiscal Year 2021 National Defense Authorization Act managed to pass in January by an overwhelming margin of 377-48 in the House and 86-8 in the Senate. That act authorized $731.6 billion, including $635.5 billion for the Department of Defense, $26.6 billion for Department of Energy national security programs (which presumably includes pilgrimages to ancient nuclear testing sites), $69 billion for overseas military operations, and $494 million for other "defense-related" activities. Included in that bill, to be sure, were some modest increases in military health care for families, including a few hours of "respite care" for military family members supporting someone with a developmental disability. But essentially none of that money went to improving the American quality of life. Want to guess if Senators Manchin and Sinema supported it? No need to even ask, is there?

Under the circumstances, I'm sure you won't be surprised to learn that the Pentagon's total assets, as measured by its ships, aircraft, buildings, vehicles, computers, and weapons, have risen steadily since 2000 even as government investment in non-military infrastructure continued at a paltry rate — unchanged since the 1970s. Of course, those hundreds of billions of dollars "invested" in military infrastructure during just the first decade of the war on terror would have led to strikingly greater capital improvements if invested in education, health care, and green energy at home.

If you take a closer look at how our money has been spent on infrastructure in these years, everything just gets uglier and uglier. For example, more than half of the money the U.S. government spent on what were called "reconstruction efforts" in Afghanistan, Iraq, and Pakistan actually went to funding and arming local security forces. In Afghanistan, we recently saw just how well that turned out.

Beyond that, examples abound of so-called development money poorly spent or not accounted for. As a 2011 SIGAR report made all too clear, for example, one federally funded project in Afghanistan, the Commander's Emergency Response Program, was tasked with building roads in that country. The investigation found that of 11 road projects surveyed, nine lacked plans or resources for future maintenance.

Similarly, according to a paper by Costs of War Project co-director Lutz and grassroots organizer Sujaya Desai, a 2012 SIGAR report revealed that the U.S. Army Corps of Engineers could not account for 95% of the materials it purchased that year to construct roads and other infrastructure in Iraq, including, for example, $1.3 billion in fuel that it had theoretically paid for. In 2011, the Commission on Wartime Contracting in Iraq and Afghanistan estimated that $31 billion to $60 billion were squandered in both war zones in incidents of waste, fraud, and abuse. Even the lower estimate would have covered about a year of paid family leave for working Americans.

Nor has all of this war spending made us safer. Stephanie Savell, for instance, did a case study of the U.S. war on terror security assistance to the African country of Burkina Faso. What she showed was how our ongoing security operations in the name of counterterrorism actually tend to do just the opposite of keeping us or anyone else safe. According to Savell, security assistance to foreign governments in just 36 of the 79 countries where we've recently conducted such operations cost the U.S. a total of $125 billion between 2002 and 2016. Yet the effect of such assistance, as she made all-too-vividly clear in one country, has been to bolster an authoritarian government, repress minority groups through violence, and facilitate war profiteering, while failing to provide needed humanitarian aid of any sort in the contested areas.

$8 Trillion (And Counting)

Our problem in this country, folks, isn't lack of funds, no matter what the Republicans, Manchin, and Sinema may claim. Our problem is that we're not paying attention to where our money actually goes or truly thinking about how it might be better spent.

As Pentagon experts William Hartung and Mandy Smithberger explained recently, even an exceedingly modest reduction in Pentagon spending of $1 trillion, or 15 percent of total current expenditures over the next decade (as recommended recently by the Congressional Budget Office), would still leave the Pentagon with a staggering $6.3 trillion to spend in those same years. Unfortunately, everything's moving in the other direction. As those two authors remind us, only recently the Biden administration requested $750 billion for the next Pentagon budget and for nuclear weapons development at the Department of Energy. The Democratic-controlled House promptly responded (with, of course, strong support from the Republicans there) by voting to add $25 billion to that already stunning sum, even as the arguments only continued about how little to spend on us here at home.

If there's one thing that's reminiscent of overseas adversaries like Russia from which we theoretically seek to defend ourselves, it's a tendency to spend increasing amounts of money on military assets at the expense of the general population, while demonizing those who would dare challenge that way of cutting up the national pie.

Every American should check out the Costs of War Project website to see how much money we're still spending on military operations and decide for themselves whether it might not be better spent domestically. And if you think it might, Hartung and Smithberger's article on cutting fat from the Pentagon budget is an excellent place to start. Send it to your elected representatives and ask them why we've spent $8 trillion on these endlessly failing wars of ours when we could have been building a social safety net here at home instead.

In the meantime, let me tiptoe into my son's bedroom and make sure he's truly sound asleep and then catch a few winks myself.

Copyright 2021 Andrea Mazzarino

Andrea Mazzarino, a TomDispatch regular, co-founded Brown University's Costs of War Project. She has held various clinical, research, and advocacy positions, including at a Veterans Affairs PTSD Outpatient Clinic, with Human Rights Watch, and at a community mental health agency. She is the co-editor of War and Health: The Medical Consequences of the Wars in Iraq and Afghanistan.


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