This article was published by The McAlvany Intelligence Advisor on Wednesday, March 13, 2019:
The slapstick comedy the Punch and Judy show is loved by British audiences, many of whom pay the puppeteer to bring the show into their homes for parties and celebrations. Mr. Punch is abused by his wife Judy during brief sketches, with the audience cheering her on or warning Mr. Punch of what is coming.
On Monday, Mr. Trump was the master puppeteer, bringing his Punch and Judy show to millions in the guise of a serious discussion over government spending. He called it “A Budget for a Better America – Promises Kept. Taxpayers First.”
If his preliminary budget proposal was designed to bait Democrats, it worked. House Speaker Pelosi reminded the president that “Congress refused to fund his wall and he was forced to admit defeat and reopen the government. The same thing will repeat itself if he tries this again.” Senate Minority Leader Schumer (D-N.Y.) said the $8.6 billion Trump is requesting to finish building his wall “would be better spent on rebuilding America.” The chairman of the House Budget Committee, Rep. John Yarmuth (D-Ky.), said that Trump’s call for cuts to various welfare programs in order to pay for increases in defense spending “dangerous” while reminding his followers that, under the Trump administration, the national debt has ballooned from $20 trillion to $22 trillion. They were the result, said Yarmuth, of Trump’s “tax cuts for the wealthy and large corporations, and now it appears his budget asks the American people to pay the price.”
Few others were taking his show seriously. It assumed that the U.S. economy would grow by 3.1 percent per year for the foreseeable future. It assumed that interest rates would remain low and that buyers of increasingly risky government debt would be easily persuaded to purchase it. It assumed that the economy would not suffer a recession in the next ten years (this is called “straight-line thinking in a curvilinear world”). It ignored altogether the Congressional Budget Office’s forecast that the government’s debt would exceed $36 trillion no later than 2029. It ignored persuasive evidence that the real national debt is closer to $200 trillion, using Professor Laurence Kotlikoff’s “generational accounting” rules.
In other words, Trump’s rollout on Monday was show business for the Democrat ignoranti salivating for the opportunity to bash the president once again.
Trump sucked them in with his declaration that his budget “provides a clear roadmap for the Congress to bring Federal spending and debt under control. We must [he said, tongue in cheek] protect future generations from Washington’s habitual deficit spending.”
It does nothing of the sort, of course, but Democrats fell for it like an egg from a tall chicken. It’s a charade, as a simple comparison with his puppet show back in 2017 reveals. Trump’s first budget proposal in 2017 projected that the deficit would total $488 billion in 2020, and that deficits would disappear altogether by 2028. Trump’s budget now projects that the 2020 deficit will exceed $1.1 trillion, and that deficits wouldn’t disappear until 2034. The problem is simple: Trump’s budget released on Monday projects $2 trillion less in tax revenues over the next ten years than originally forecast, while the federal government is expected to spend $1.9 trillion more.
What lit up the Democrats was the president’s intentional audacity regarding building his wall. He requested $8.6 billion from the same Democratically-controlled House that just rejected his demand for $5.6 billion. It also included increased spending for ICE (Immigration and Customs Enforcement) that some Democrats want to abolish. Finally, it included policy changes that would end sanctuary cities.
How could they not rise to this bait?
One knows that it’s just a show when the elephant in the living room is ignored. The elephant has three heads: Social Security, Medicare, and Medicaid. One of those who should by now know better was Justin Bogie, writing in the Daily Signal, who noted: “Without fundamentally reforming Social Security, Medicare, and Medicaid, it will be impossible to achieve a sustainable budget over the long term.”
Bogie is right, of course. But he thinks Trump’s offering is serious.
It is not. Nor will be the expanded version of his Punch and Judy show that is expected next week. It will confirm what careful observers of the show already know: it’s fun, it’s frivolous, it’s silly, it’s totally disconnected from reality, and if a few Democrats take him seriously, so much the better.
President Trump’s “A Budget for a Better America”
MarketWatch.com: Trump’s $4.7 trillion budget relies on strong growth
Wall Street Journal: White House Proposes $4.7 Trillion Budget for Fiscal 2020