By Shamayeta Rahman, Transcript Reporter
Currently the U.S. has about $14 trillion in debt, which is about 75 percent of the gross domestic product.
This is projected to grow by almost 130 percent by 2040. Majority of the U.S. public spending goes into federal health care and Social Security costs.
High national debt hinders the economy greatly and often leads to great fiscal crises.
According to Gallup, 72 percent of Americans believe that reducing the federal budget deficit should be the elected candidate’s first priority.
Trump’s primary stand on the national debt issue has been the promise of reducing taxes for high wage earners to promote investment and growth in the economy.
He also intends to increase growth by tightening up trade by increasing tariffs on the international front and deregulating on the domestic front.
He believes that all of this will help drive the economy forward.
While cutting down on Obamacare and instead proposing a state-based block grant for Medicaid will save him about $500 billion, it will be spent in whatever health care reform that will be in place instead of Obamacare.
He proposed a “Penny Plan” which would allow massive budget cuts in the federal government even if it is by 1 percent a year (excluding defense, Social Security and federal health spending), but a majority of this saving will also be taken up by increased spending on defense and veteran care.
Trump has a lot of reforms in mind, but without a lot of information on how he plans to fund or sustain these programs.
He will be cutting down on income taxes which will cost the government about $4.5 trillion in revenue, leaving the country with about $5.3 trillion in federal deficit.
Under his policies, the U.S. could be looking at about 105 percent of the GDP in national debt.