Donald Trump on Budget & Economy
2016 Republican nominee for President; 2000 Reform Primary Challenger for President
Here's how the plan's architect described it: "By my calculations, 1 percent of Americans, who control 90% of the wealth in this country, would be affected by my plan. The other 99% of the people would get deep reductions in their federal income taxes."
His name? Donald Trump.
Trump's idea was that paying off the national debt would reduce federal interest rate costs, allowing for a middle-class tax cut. Instead, the debt volume has increased dramatically since 1999, but federal debt service payments as a share of GDP are actually lower than they were back then, since interest rates have fallen dramatically.
"We've accomplished an economic turnaround of historic proportions," Trump said in a July 2018 Rose Garden press conference.
This is false. The economy wasn't hurting when Trump took office, and it hasn't turned around in just two short years. The economic turnaround Trump refers to is actually credited to his predecessor, President Barack Obama, who steered the country from a devastating recession into booming growth.
Economists told NBC News that Trump might have given the economy a boost with the tax cuts and dampened it with the trade war, but he didn't turn things around. Economies do not turn on a hair with a new presidency. While Obama can look back on his eight years and see his leadership play out, Trump's effect is still not yet known.
For starters, we should put in place a modern version of Glass-Steagall and separate plain-vanilla banking like checking accounts and savings accounts from crazy risk-taking on Wall Street. This doesn't have to be partisan. My first cosponsor for a twenty-first-century Glass-Steagall bill was the Republicans' 2008 presidential nominee, Senator John McCain. In 2016, Donald Trump campaigned on this idea, and, at his insistence, adopting Galss-Steagall was added to the Republican platform. But the Republican leadership has refused to move any such legislation and now President Trump has put in place an economic team that is headed in the opposite direction.
Here's another idea: The SEC should hire a leader who doesn't work for Wall Street.
Oh, and here's a good one: when CEOs break the law, they ought to go to jail, just like anyone else.
We've lost more than 1/4 of our manufacturing jobs since NAFTA was approved, and we've lost 60,000 factories since China joined the World Trade Organization in 2001. Our trade deficit in goods with the world last year was nearly $800 billion dollars.
To accomplish our goals at home and abroad, we must restart the engine of the American economy--making it easier for companies to do business in the United States, and much harder for companies to leave.
Right now, American companies are taxed at one of the highest rates anywhere in the world. My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone.
Last week, they came out with an anemic jobs report. Look, our country is stagnant. We've lost our jobs. We've lost our businesses. We're not making things anymore, relatively speaking. Our product is pouring in from China, pouring in from Vietnam, pouring in from all over the world.
GDP is at 1% now, and if [Hillary] got in, it will be less than zero. But we're bringing it from 1% up to 4%. And I actually think [with my economic plan] we can go higher than 4%. I think you can go to 5% or 6%. And if we do, you don't have to bother asking [about jobs], because we have a tremendous machine. We will have created a tremendous economic machine once again. To do that, we're taking back jobs. We're not going to let our companies be raided by other countries where we lose all our jobs, we don't make our product anymore. I
TRUMP: Well, I say they're wrong, because I'm going to create tremendous jobs. And we're bringing GDP from, really, 1% [growth rate], which is what it is now, and if she got in, it will be less than zero. But we're bringing it from 1% up to 4%. And I actually think we can go higher than 4%. I think you can go to 5% or 6%. And if we do, you don't have to bother asking your question, because we will have created a tremendous economic machine once again, the likes of which we haven't seen in many decades. And people will again go back to work, and we'll have companies that will grow and expand and start from new.
THE FACTS: This is a recurrent claim by Trump with no evidence to back it up. It's the Federal Reserve's job to help improve the economy and to the extent that happens, political leaders may benefit. But presidents can't make the Fed, an independent agency, do anything.
Under former chair Ben Bernanke and current chair Janet Yellen, the Fed has attracted controversy by pegging the short-term interest rate it controls to nearly zero for seven years. It is still ultra-low at between 0.25% and 0.5%, a rate that some economists worry could spark a stock-market bubble or inflation. Bernanke was initially appointed by Republican Pres. George W. Bush, and reappointed by Obama.
One reason Yellen is keeping rates low is that, in some ways, she agrees with Trump that hiring needs to keep growing to provide jobs.
Trump wants rates to remain low to prevent the dollar from appreciating, which would bring "major problems." But another consideration, he noted, was the [interest payments on the] national debt: "What do we do with all of the money that we owe everybody when rates go up and now all of a sudden we have to borrow at two points more? One point more, even, is devastating. It has to be handled very, very carefully." For the Fed to base interest-rate decisions on the national debt would blur the lines between monetary and fiscal policy. It's heresy by today's standards, but [was done in the 1960s].
TRUMP: Well, I think what they should do is use the debt limit as a strong negotiating tool to make other changes and to cut costs elsewhere. The Republicans don't know how to negotiate.
Q: But let me ask you about that question of the debt ceiling. Do you think that, if it's breached, that that is an economic problem, leaving aside the question of negotiation?
TRUMP: Well, I don't want to say. And I'll tell you why. We should use it as negotiation. And the problem we have in this country is that we're so predictable.
TRUMP: OK, I would use the debt limit. I want to be unpredictable, because, you know, we need unpredictability. Everything is so predictable with our country. But I would be very, very strong on the debt limit. And I could see asking for a very big pound of flesh if I were the Republicans.
Q: But we just had 4% the last quarter.
TRUMP: But if you look at the overall average, we're doing less than 2% for the year. If China can do 7% -
Q: Right, but an emerging economy is always going to do 6%, 7%. Our sweet spot is 3% to 5%.
TRUMP: Right. If we do 6% or 7% under my plan, everybody benefits in jobs.
Q: We've never had a year of 6% or 7%. How is that gonna look?
TRUMP: Well, number one, corporate inversion is a big deal. There are many companies right now that are talking about very seriously leaving this country. And you're talking about thousands of jobs.
Q: What you're saying is, you make it all up with growth.
TRUMP: Not all up with growth. We also start cutting.
TRUMP: I would get rid of some. For example, the Department of Education. I would certainly get rid of a lot of it. I want local education. We could save a fortune with Environmental Protection--
Q: what is another agency you'd get rid of?
TRUMP: Even in the military, I'm going to build a military that's much stronger than it is right now. But you know what? We can do it for a lot less.
Q: So you believe you can spend less money on defense than we do today?
TRUMP: I think we can make our defense much stronger and spend somewhat less money.
Here's my view of this situation. We survived and prospered after 9/11, and we will do the same this time. The components are different, but I believe the government is doing the right thing with this financial mess. They have worked hard and long, but a mess is a mess. I won't equivocate on that. I saw the indications that the world was in for a tough period of time, so I can't say I'm terribly surprised.
In short, there are no guarantees. That means being alert to nation and world markets. Do your homework daily I shouldn't need to emphasize this if you've paid attention to what's transpired in the United States from 2006 until now, which is late 2008. There was an implosion in the financial sector that was unprecedented in our history. I see it as a wake-up call.
I tried to warn people back in 2006. Now I'm back to tell you loud and clear that this area of your life is of great importance. We are all businessmen and women, whether you see it that way yet or not. If you like art and can't make money at it, you eventually realize that everything is business, even your art.
Rent control is a disaster for all but the privileged minority who are protected by it. As much as any other single factor, rent control is responsible for the desperate housing crisis that has plagued NYC for the past 20 years. Like a lot of failed government programs, rent control grew out of a decent idea that ended up achieving exactly the opposite of its intended effect.
Unlike most developers, I donít advocate eliminating rent control. I just think there ought to be a means test for anyone living in a rent-controlled apartment. People with incomes above a certain sum would be given a choice between paying a proportionally higher rent for their apartment or moving somewhere else.
Trump paid federal income taxes in three out of five years from 1975 to 1979, according to a report to the New Jersey Casino Control Commission, which viewed Trump's tax returns when the Trump Plaza Corporation applied for a casino license in the state in 1981.
Although the returns were not disclosed, the report indicated that Trump paid $18,714 in taxes on $76,210 in income in 1975, $10,832 in taxes on $24,594 in income in 1976 and $42,386 in taxes on $118,530 in income in 1977. Trump reported income losses of $406,379 in 1978 and $3,443,560 in 1979, and thus paid no federal income tax for those years.
TRUMP: That makes me smart.
CLINTON: So if he's paid zero, that means zero for troops, zero for schools or health. And I think probably he's not all that enthusiastic about having the rest of our country see what the real reasons are, because it must be something that he's trying to hide.
The bad news seemed to weigh on his mind. "Nobody wants to write the positives," he shouted to the crowd. "Over the years, I've surprised a lot of people. The largest surprise is yet to come."
He prided himself on buying or building the very best, sometimes overpaying out of faith in the Trump name and an ever expanding market. His propensity for purchases that played to his ego had been especially evident in his acquisition of one of New York's most storied properties, the Plaza Hotel.
TRUMP: I'm going to be bringing back jobs from China, from Japan, from India, from Brazil. This is going on at a level that you have never seen before. We now have corporate inversions, where companies are moving out of the United States. And they will be moving out in big numbers if we don't do something quickly. And my plan stops all of that.
Q: So, you want to close the loopholes for tax havens?
TRUMP: And I want to bring back trillions of dollars that is stuck in other countries that we won't let back in because we don't have intelligent people running our country.
Q: What about other loopholes on the personal side? Mortgage interest stays in there? Charitable giving?
TRUMP: That's right. Mortgage interest deduction would stay, absolutely. Carried interest, though, would not stay. One of the ways that the hedge fund guys who make a lot of money pay very little tax, the carried interest deduction. I'm knocking that out.
This truth wasn't lost on other hoteliers. President of the Americana Hotel, complained that the deal was "immoral and unfair." Harry Helmsley wondered aloud whether "maybe too much is being given" to the Trumps.
FIORINA: I think Mr. Trump is a wonderful entertainer. He's been terrific at that business. One of the benefits of a presidential campaign is our judgment and temperament is revealed over time and under pressure.
Q: And his temperament regarding the nuclear codes?
FIORINA: That's not for me to answer; it is for the voters of this country to answer.
TRUMP: As far as temperament, I think I have a great temperament. I built a phenomenal business with incredible, iconic assets. And I may be an entertainer, because I've had tremendous success with #1 bestsellers all over the place. But I will tell you this: What I am far and away greater than an entertainer is a businessman, and that's the kind of mindset this country needs to bring it back, because we owe $19 trillion right now, $19 trillion, and you need this kind of thinking to bring our country back.
Firing an employee can leave your business in a hole; that's why so many companies hang on to less- than- desirable workers. To replace an employee, you have to go through the entire costly and time- consuming hiring process again. But frequently, you have no choice. If your business is to move forward, unproductive people must go.
Firing can be an essential and responsible business decision. It isn't pleasant, but lopping off a branch can save the tree.
In reality, most of us need to make money; we have bills to pay. However, other objectives can be equally, or more, important, including the stimulation and satisfaction you receive from your work and its challenges. There's also the pleasure of helping others and doing good or the opportunity to learn, grow, and deal with outstanding people, to name just a few.
I honestly believe that my attitude, willingness to work hard, and determination pulled me through. Things are so much better now than they were back then, and I came out of it better than I had been at my previous best.
The most important lesson I learned from that ordeal was that I could handle pressure. At that time, many of my friends also fell deeply in debt. Some went bankrupt. Despite my tremendous debt and all the pressure, I never went bankrupt. I was able to work it out, and I learned I could take the heat. You don't know what pressure is until you owe billions of dollars to banks and they all want their money at once.
The maddening thing is that thereís really no excuse for the way the town has developed. Atlantic City represents a unique situation; it is like no other town in America. In most places youíll find ideas but not enough money to carry them out. In Atlantic City there is plenty of money, but there are almost no ideas.
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2020 Presidential Democratic Primary Candidates:
Sen.Michael Bennet (D-CO)
V.P.Joe Biden (D-DE)
Mayor Mike Bloomberg (I-NYC)
Gov.Steve Bullock (D-MT)
Mayor Pete Buttigieg (D-IN)
Sen.Cory Booker (D-NJ)
Secy.Julian Castro (D-TX)
Rep.John Delaney (D-MD)
Rep.Tulsi Gabbard (D-HI)
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CEO Tom Steyer (D-CA)
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CEO Andrew Yang (D-NY)
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Rep.Justin Amash (Libertarian-MI)
CEO Don Blankenship (C-WV)
Howie Hawkins (Green-NY)
V.P.Mike Pence (R-IN)
Gov.Mark Sanford (R-SC)
Pres.Donald Trump (R-NY)
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Rep.Joe Walsh (R-IL)
Gov.Bill Weld (L-NY,R-MA)
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