Exploring Trump's Claim of Using Tariffs to Pay Down $21 Trillion in Debt

Trump claims he will use tariffs to pay down the national debt. Let's explore the idea with pictures.

Trump's Claim

Data for the above chart downloaded from US Government Debt, not an official government website. There are lots of excellent charts one can view already made or create from downloaded data.

Budgeted vs. Actual Deficits

I created the above chart showing budgeted deficits vs what actually happened. I calculated actual deficits by subtracting the year-over-year national debt from the year-over-year national debt from the prior year.

Projections vs Reality

In nearly all cases, the actual deficit is way higher than projected. Why?

Because the projected deficit does not include all of the amount owed to the Social Security Trust Fund. That amount is called off-budget. But when the calendar year rolls over, the difference magically appears as a bigger than projected increase in the national debt.

Trump Projected Deficits

Deficits under Trump are expected to range from $666 billion to $987 billion, increasing every year. The total projected sum is about $3.47 trillion.

Tariff Study

The obvious problem with the study is that it does not include any losses.

Let's ignore the losses and assume there are only gains. In fact, let's assume the gains will be 100 times greater annually, without any losses.

Question of the Day?

Even if the deficit actually comes in at the projected rate (trust me, it will underperform expectations), what is the likelihood tariffs will reduce the national debt?

The answer of course is ZERO.

Trump's budget will add a minimum of $500 billion every year to the national debt.

Mike "Mish" Shedlock

Comments
No. 1-11
ML1
ML1

Trump is spending like a drunken sailor and increasing the US government debt at a much higher rate than Obama did...

ML1
ML1

Without the continued increase in US government debt, US state debts and US company debts and US consumer debts the offshoring of well paying jobs to China, India and Mexico and the importation of millions of illegal immigrants and millions of legal immigrants to USA to lower wages would have led to a complete collapse in demand and consumption in USA crashing markets and crashing profits.

This means the only way offshoring of well paying jobs and importing millions of illegal immigrants and millions of legal low wage immigrants to USA could have happened is through continued increases of debt.

If there was no continued increase of debts companies offshoring jobs or giving illegal immigrants jobs or importing low wage legal immigrants would have had to eat the consequences of their actions by crashing demand in USA for their products and services so they would NOT have offshored production and they would NOT have hired illegals or imported low wage immigrants.

The problem with the huge debts is that since increases in debts have been used to hide the hollowing out and destruction of US economy these debts can NEVER be repaid and there is a huge FALSE demand for things and services caused by increases in debts that are not sustainable.

When the crash comes it will be worse than 1930's...

Debts will NOT be repaid because they can NOT be repaid.

Stock prices are a mirage based on a false demand for products and services.

Advertising based businesses like Facebook and Google have stock prices that are based on inflated prices and inflated demand for advertising caused by consumption enabled by continued increase in debts.

Zardoz
Zardoz

Thats a lot of ifs...

Zardoz
Zardoz

Ultimately, the consumer must pay the tariff. Guess whose taxes just got raised ?

Realist
Realist

Trump is going to pay down the 21 Trillion national debt with tariff money! Hilarious! Who could possibly be stupid enough to believe that! Oh, right; Trump supporters. Where does this tariff money come from anyway? From American businesses and consumers of course! So its just another tax. If Trump manages to last 8 years as President, I expect him to add more to the debt than Obama, who added more than Bush, who added more than Clinton etc.

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