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Trump’s Other Expensive Socialist Plan

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Unfortunately, the Trump Wall on the U.S.-Mexico border, which is estimated to cost around $15 billion but undoubtedly will end up being much higher, is not the only socialist project that President Trump is devoted to. There is also his massive $1 trillion infrastructure public works project, which, not surprisingly, is garnering the support of both conservatives and liberals. Yes, that is one trillion dollars!

Let’s put Trump’s $1 trillion socialist project in perspective.

As everyone knows, for many years the federal government has been spending much more money than it has been bringing in with taxation, in large part because of the ongoing, perpetual wars in Afghanistan, Iraq, and the rest of the Middle East.

Look at the figures just since 2008. These figures represent the deficit — that is, the amount by which federal expenditures exceeded tax revenues.

2008 $458 billion
2009 $1.413 trillion
2010 $1.294 trillion
2011 $1.295 trillion
2012 $1.087 trillion
2013 $679 billion
2014 $485 billion
2015 $438 billion
2016 $587 billion

To get a clearer understanding of which is happening, imagine that for the last 10 years your annual income has been $50,000 and that you have been spending $90,000 every year. The extra $40,000 you have been putting on your credit cards. Today, you would owe $400,000 to the credit card companies. Assuming you don’t file for bankruptcy, in order to repay the debt you would need to cut out other things, such as vacations, in order to devote the money to begin paying down the principle of the debt.

Spending more than what it has been collecting in taxes is what the federal government has been doing for decades. It has been collecting x tax revenues and spending a sum that is much larger than x. The result is a federal debt totaling $19.969 trillion. That amounts to $61,547 per citizen or $166,778 per taxpayer. To get a good sense of the magnitude of the federal debt problem, see usdebtclock.org. Would it be easy for you and your spouse today to pay $166,778 each to cover your shares of the federal government’s debt?

Let’s assume that the 2017 deficit remains in the $500 billion range. Add to that the $1 trillion dollars that Trump is going to spend on his infrastructure public works project. That means that at the end of the first year of Trump’s presidency, the federal government’s debt will have risen to around $21.5 trillion.

Both liberals and conservatives are praising Trump’s infrastructure plan. They say that it will bring jobs to Americans and stimulate the economy. They fail to comprehend a fundamental point about government projects, a point that Frederic Bastiat and Henry Hazlitt emphasized: the unseen consequences of government projects. Once Trump rebuilds a bridge, for example, he will point to the bridge and exclaim, “See what we did. We brought jobs to your community as well as a bridge.” But note something important: That the money that built the bridge came from taxpayers or was sucked out of the private sector through borrowing. What is unseen is all the things that taxpayers and savers would have done with that bridge money if they had been free to keep their own money for themselves. We don’t see all the jobs and businesses that did not come into existence because people in the private sector had their money taken away from them to pay for Trump’s bridge.

Meanwhile, expenditures for the welfare state, especially Social Security, Medicare, Medicaid, and the drug war, and expenditures for the warfare state, especially the forever wars in the Middle East and Afghanistan, continue apace and grow incessantly, with every welfare recipient committed 100 percent to making sure his dole is continued in full and even expanded.

This massive spending and borrowing spree cannot end well. Ultimately, the amount of the welfare-warfare-debt overload to fund the parasitic part of the society becomes too heavy for the producing part of society. That’s when the system begins to implode in on itself. Just ask the people of Greece. Just ask the people of Puerto Rico.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.