Meme (ory) Lane
There is absolutely no way whatsoever that Donald Trump and Elon Musk are going to pay for their tax cuts and bring down deficits, or even keep them under control, without Social Security and Medicare getting cut sooner or later. It’s basic math.
And if you don’t believe me, believe someone who knows better than almost anyone else: David Stockman, who once did for Ronald Reagan what Musk is trying to do for Trump.
Stockman, then just 34, was Reagan’s first budget director and took on the task of slashing all that “fraud, waste and abuse” out of the federal budget.
And in a new critique, he has accused Trump and his Republican allies in Congress of threatening to plunge the country “into a paroxysm of fiscal madness” that would eventually cause the financial system to “implode.”
Stockman, it should be added, is a staunch small-government conservative, and once attracted the ire of liberals just as Musk is doing now. He is no fan of government largess, and hopes Trump and Musk succeed in finding savings.
But “as helpful as the Department of Government Efficiency campaign against waste and inefficiency might be,” Stockman wrote in the Boston Globe, “it is virtually irrelevant when it comes to staunching a public debt that is hurtling fast toward catastrophe.”
The reason: The amounts being saved are trivial compared to the current debt trajectory and the cost of Trump’s proposed tax cuts. It’s like trying to bail out the Titanic with a teaspoon.
Stockman reckons that if Trump got all of his proposed tax cuts, he’d slash federal revenues over the next 10 years to just $55 trillion.
Proposed federal spending over the same period: Try $89 trillion, or $34 trillion more.
Eliminating USAID entirely would cut just 0.5% of federal spending. Pennies on the dollar? It’s not one penny.
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And if you think the $89 trillion figure leave tons of room for easy cuts, think again. Stockman reckons $70 trillion of that will go on just five things: Social Security, Medicare, veterans’ benefits, debt interest, and the stuff Trump wants to do — like spending more on defense and border control.
“So even if the Trump administration massively slashed the rest of the federal government — including Health and Human Services, the Environmental Protection Agency, and the departments of Labor, Interior, Energy, and Transportation — the red ink would still total far more than $30 trillion through 2035,” wrote Stockman.
“The alternative routes often advocated by MAGA partisans — taking the ax to fraud and waste or spurring accelerated economic growth with tax cuts and deregulation — simply won’t make a dent in the Brobdingnagian magnitude of the nation’s debt spiral,” he added.
Don’t believe him? Stockman has done the math. He reckons that a brutal, unprecedented chainsaw attack on the federal government — going far beyond Musk, eliminating the FBI completely, slashing the Federal Aviation Administration in half, and so on — would save you maybe $1 trillion over 10 years.
“That is, the Trumpian fiscal framework starts with a $30 trillion-plus deficit over the next decade. Yet all of the above sweeping retrenchments of Washington as we know it would not save even $1 trillion over the same period.” Stockman wrote.
Meanwhile, the claim that somehow these tax cuts will be paid for out of extra economic growth “has been the GOP’s go-to fiscal subterfuge for several decades,” Stockman noted. Even if somehow the economy miraculously grew at 3% a year — far above modern levels — that would only cut the deficits by $2.5 trillion, he said.
Donald Trump has said several times that he won’t touch Social Security or Medicare. Some of his wording has left some wiggle room, but let’s take his statements at face value. It doesn’t change much, or anything; sooner or later, this won’t be a choice — it will be a mathematical necessity. Maybe Trump won’t cut these programs; maybe he’ll leave that to whoever comes after him. But sooner or later, D.C. will have to come for Social Security and Medicare for the same reason Willie Sutton robbed banks: That’s where the money is.
Let it be added that the deficit is hardly of Donald Trump’s invention — both parties, and multiple presidents, have been responsible. But that doesn’t help us right now.
Even if you make less heroic estimates than Stockman’s about the full cost of Trump’s tax-cutting plans, the numbers still don’t work. For instance, the Congressional Budget Office calculates that just extending the 2017 tax cuts would cut federal revenues over the next 10 years by $4.6 trillion, leaving total revenues ( see table B-1 here) at just under $63 trillion. It’s still nowhere near.
Put it another way: According to the Congressional Budget Office, federal taxes currently bring in about 17% of gross domestic product. Meanwhile Social Security, Medicare, defense, and debt interest alone cost 14.4%. (That’s before you increase defense spending, of course.)
So those four items alone already take up 85 cents of every tax dollar raised. To balance the budget, you would have to cut everything else — everything, from Medicaid to highways to the Justice Department to the FAA — by 70%.
Rising government spending isn’t much of a surprise once you realize the population is aging, the baby boomers are retiring, and many more people will be relying on the federal programs provided for retirees. The CBO says that from 1975 to 2024, spending on Social Security and Medicare averaged 6.5% of gross domestic product.
This year, they take up 8.2%. And by 2035, that figure is expected to hit 10%.
It’s more than 40 years since Ronald Reagan was first elected president on a platform of slashing federal “waste and fraud” and using the savings to pay for massive tax cuts. Stockman was his budget hatchet man.
When Reagan came to office, the net national debt was 25% of gross domestic product. When he left office eight years later, it was 40%.
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