By the Numbers

By the Numbers 

       As we approach the serious general election hoo-hah which will surely follow primary season, it seems germane to the decision-making process to evaluate the current administration in the light of campaign statements and promises. We know the current president is a prevaricator. Some of his lies have degrees of nuance and are debatable. Some, however, are numerically absolute and what follows are discussions related to three of those.

“Who else could take 16 vacations, play over 100 rounds of golf and hold over 300 fundraisers while serving as POTUS besides @BarackObama?” (Trump Tweet)

"I love golf, but if I were in the White House, I don't think I'd ever see Turnberry again," he said in February 2016, referring to the famous course he owns in Scotland. "I don't think I'd ever see Doral again," he added, referring to the famous course he owns in Miami. "I don't ever think I'd see anything — I just want to stay in the White House and work my ass off, make great deals, right? Who's gonna leave?" (Trump interview NBC, August 2016)

       Based on the above, one might expect a workaholic Trump ethic, reflected by greatly reduced operation of Air Force One, as the President remains at home, immersed in presidential stuff. Not so much as it turns out.

       Re the first “tweet”: As it turns out (bearing in mind that Trump complained about 8 years of Obama golf and vacations):
Comparing the two, week for week, at the 160-week point:

160 weeks: Obama golf outings 82, Trump 200

Where: Trump: only private clubs, flying to most of them

Obama: 62% military courses (drive to many of them,) 20% private, 18% public.

Days Trump has spent at Mar a Lago: 127. Cost of flights to Mar a Lago (30 so far): over $59,110,000

Days Trump has spent at Bedminster (NJ): 75. Cost of flights to Bedminster (23 so far): $18,375,500

Trump has visited his clubs once every 4.7 days since his inauguration! Projected visits to golf clubs in four years: 314.  Projected visits in eight years: 628

Vacations: Obama 16 total (8 years), Trump 27 (3.3 years)
Cost of vacation travel: Barack Obama: 2009-2017 $96 million, Bush 43: $140 million, Clinton: $128 million, Trump less than 4 years: well over $80 million, excluding travel for “Rallies”, which are not specifically campaign spending, but for which we pay for AF One at $27,000 per hour! The takeaway here: Surprise! Trump is a blatant liar.

       All the above pales into insignificance when compared to the excesses of two other Trump pre-election fables. No, I am not referring to the “wall” since it was a measly $5 billion lie.

       First: Let’s consider the effects of the promises to take on China with “port taxes” which, as someone subsequently told him are actually known to real economists as “tariffs.” The vast majority of these same economists, none of which, apparently, Trump consulted, advised against the imposition of such tariffs. The result:

       “Altogether, the president’s tariffs are projected to increase nationwide consumer costs by nearly $78 billion annually.” (American Action Forum research, Feb. 5, 2020)
       Note that the above figure is simply an estimate of what we, as consumers, will pay because US importers have to pay tariffs and pass that increase on to us. This equates to just about $831 per US household in 2020.

       However, that’s not the only impact of tariffs. Nations on which we place tariffs, will retaliate (and have done) by refusing our exports in favor of other producers/nations. This has slammed American farmers, especially those who produce soybeans and wheat. The Trump administration, which has criticized government aid to individuals in need, such as food stamps, has responded by massive payments to farmers disadvantaged by his ill-advised tariffs.

       It's an enormous amount of money, more than the cost of bailing out the auto industry during the financial crisis of 2008. The auto industry bailout was fiercely debated and criticized in Congress, but the USDA created this new program out of thin air, under the veil of a USDA program called the Commodity Credit Corp. Many people (but not Trump or Agriculture Secretary “Sonny” Perdue) have raised questions about whether using the Commodity Credit Corp. for this new purpose is even legal. This relief is simply payouts, which were not previously funded by Congress, to farmers hurt by Trump policy. 

       How much, you ask? This year, in addition to Congressionally approved welfare to American farmers, $28 billion in extra “charity” will be funneled to soybean (and other commodity) farmers to somewhat assuage the effects of tariffs. The decision to start the trade war was costly and, by tapping the federal Treasury, the Trump administration is avoiding the political fallout from that decision.

      As noted, payments are quite generous, but apparently, they are less that rigorously managed. According to several analyses by independent economists, the USDA is paying farmers roughly twice as much as the actual harm that they suffered from the trade war. Since payments are based on potential production, the larger the farm, the larger the payments. Thousands of farmers got more than $100,000 each!

       According to an NPR analysis of USDA records of payments made through July 2019, 100,000 individuals collected just over 70% of the money. Many of these are assets of major agribusinesses. Some are members of Congress. In summary, (per the non-profit Environmental Working Group) $38 million of last year's trade relief went to people who don’t even work on farms. Even with the non-budgeted deficit increasing farm charity, Trump's aid payments aren't saving everyone. Farm bankruptcies are up 24% compared to the year before, according to the American Farm Bureau.

      Additionally, Trump is wrong (aka lying) when he claims that China is paying the tariffs. The cost of the tariff comes directly out of the bank account of an American importer when the good arrives at the port. As of the end of 2019, US companies have paid $46 billion more in tariffs than they would have without Trump's tariffs.

       The third world class lie: "We're not a rich country. We're a debtor nation...We've got to get rid of the $19 trillion in debt," "I think I could do it fairly quickly...I would say over a period of eight years," Trump said this to a The Washington Post reporter in April 2016, several months before the election. He suggested he would do so by renegotiating trade deals and creating trade surpluses. (discussed and debunked above). The reality is that, three years into his presidency, the deficit is 68 percent higher than when he started. Had Trump inherited a disaster of the proportions that Barack Obama did, this might be understandable, but the reality is far different.

       The first Obama term was beset by the housing bubble collapse, bank and insurer bailout, and resulted in significant deficits. Previous deficits from 2001-2011 were attributable to the Bush tax cuts on the wealthy, accompanied by wars in Iraq and Afghanistan, which were almost identical to the decrease in tax revenue, and increases in Medicare, Medicaid and resultant higher national debt service. These totaled $11.7 trillion, of which only $0.9 trillion was Obama stimulus, but for which Republicans castigated him exclusively. 2009 was the high, with deficit totaling 9.8% of GNP. By 2014, the deficit was down to 2.7% of GNP, 2.4% in 2015, and 3.1% in 2016.

       Self-proclaimed deficit “hawk” Trump has since run deficits of 3.4%, 3.8%, 4.6%, and 4.8%, with 2021 projected at 4.1% of GNP. All these have been incurred with what Trump touts as “The strongest economy ever.” There is an explanation. Trump has a cavalier attitude about the nation’s debt load similar to his corporation’s debt. During the campaign, he said the nation could "borrow knowing that if the economy crashed, you could make a deal.” (Again, with the “deal”, bullshit.) He further stated, “The United States will never default because you can print the money." This is in accordance with the relatively controversial school of Economic thought known as Modern Monetary Theory.

       Trump seems to view the nation’s debt as he does personal debt. In 2016, a Fortune magazine analysis revealed Trump's businesses were $1.11 billion in debt. (although no more recent data is available, it is almost certainly higher today.) That debt includes $846 million owed on five properties, including Trump Tower, 40 Wall Street, and 1290 Avenue of the Americas in New York. It also includes the Trump Hotel in Washington D.C. and 555 California Street in San Francisco. But the income generated by these properties pays their annual interest payment. In the business world, Trump's debt is reasonable. Carrying debt is simply business as usual. For a nation, however, increasing debt means that every year more revenue goes, not to current concerns, but to simply covering the ever increasing interest on the money we owe others, which, in our case, means Japan, Saudi Arabia, China and ourselves.

       Historically, deficits have been counter-cyclical (meaning they move in the opposite direction of the economy) and are largely temporary. Today's deficits are an aberration, unfortunately: both pro-cyclical (“strong economy – high deficit”) and permanent. Running large deficits when the economy is already strong, as we are seeing in the Trump years, means that any boost provided to the economy will be temporary, and may eventually put unnecessary upward pressure on inflation and interest rates. Hint – this means tending toward recession!

       Running permanent deficits means that they will increasingly hurt investment and growth over time. They cannot simply be waited out. Our current US rising deficits are largely driven by the increasing cost of interest and health and retirement programs, which are caused by rising health care prices and an aging population which is a higher percentage of the whole (boomers) and longer lived. Yet even with these factors, deficits were on course to decline over the next couple years before Congress enacted fiscally irresponsible tax cuts and spending hikes.

       We should know better. Reagan spurred a recession with tax cuts on the wealthy. Bush 43 did it with an unnecessary war and more tax cuts. Obama was elected after a record housing bubble collapse from 2007, bottoming out in 2011, and triggering an accompanying recession over the same period.

       Trump’s recorded response to concerns expressed to him over his "booming economy" high deficits? The controversy came to a head in early 2017. Senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” (huge rise) spike in the national debt in the not-too-distant future. Trump, noting that the data suggested the debt would reach a critical mass only after his possible second term in office, responded, “Yeah, but I won’t be here,” according to a source who was in the room when Trump made this comment during discussions on the debt.

This, then, is the problem, huh?