in his novel The sun also rises (1926), Ernest Hemingway imagined a dialogue between two alcoholic veterans in which the first asks the second how he became bankrupt. The answer has become legendary: “At first little by little and then suddenly. » American reality is about to join the myth with the program of the two candidates for the presidency of the United States, Republican Donald Trump and Democrat Kamala Harris. The country’s public deficit is out of control and reaches, for the fiscal year ending September 30, 6.3% of GDP, that is, 1,830 million dollars (1,660 million euros), according to the budget office congressional. This deficit doubles the level of 2019, the last “normal” year of Donald Trump’s term.
The Biden administration thus leaves a degraded situation, despite the growth experienced since the Covid-19 pandemic and full employment. And it will get worse. Donald Trump’s program, which includes new tax cuts, can only accelerate this trend, while Mr.me Harris, with additional social spending, does not solve the problem. To quote Mr. Hemingway, the issue is taking shape “brutal” for the republican, “first gradually” for the democrat.
Federal spending is 23.3% of GDP and revenue is limited to 17%. To fill the gap, in theory we would have to raise taxes by 37% or drastically reduce spending. Nobody wants it, even if Trump intends to entrust Elon Musk, head of Tesla and SpaceX, with the mission of examining public spending. In a study published Monday, October 7, the independent Committee for a Responsible Federal Budget regrets that“No candidate has[it] presented a plan to address the problem of the growing debt burden ».
Their central scenario predicts that, under Mme Harris, the debt would increase by $3.5 trillion to reach 133% of GDP in 2035, while Trump would increase it by $7.5 trillion, or 142% of GDP, from 100% today. If the policy does not change, the debt would increase to 125%. “Federal debt is skyrocketing. Here’s why Trump and Harris aren’t talking about it »titled the Wall Street Journal in a lengthy investigation, on September 16, noting that “Both candidates have been part of administrations that produced growing deficits. Neither man is likely to reverse this trend if elected..
“If Trump wins, the threat of inflation will be greater”
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