9 Trillion in tax cuts while spending up large on infrastructure and likely another military excursion or two. How’s that gonna work Trump?
Donald Trump has long cultivated an aura of unadulterated success, but those who scratch beneath the surface find a different story.
While the former reality television star is adept at captivating an audience, he has left a string of failures behind him, including six bankrupt businesses.
Economists are afraid he could do the same to the US economy – and there would be no coming back.
The President-elect campaigned on a platform of cutting taxes and increasing spending, and no one is quite sure where the savings would come from.
It could leave America buried under an even greater mountain of debt by the time his four-year term is over.
In 1991, the Trump Taj Mahal in Atlantic City was nearly $US3 billion in debt when it filed for bankruptcy, and Trump gave up half his stake in the casino and selling his yacht and airline.
A year later, the Trump Plaza Hotel in New York filed for bankruptcy while $US550 million in debt, with the real estate mogul giving up a 49 per cent share but remained a figurehead CEO. Another casino, Trump Castle, also went bankrupt along with the Trump Plaza Hotel and Casino in Atlantic City, which was $US250 million in debt.
In 2004, Trump Hotels and Casinos Resorts, which includes the Taj Mahal, Trump Marina and Trump Plaza casinos in Atlantic City, filed for bankruptcy with an estimated $US1.8 billion in debt.
The President-elect reduced his share in the company from 47 to 27 per cent and it was renamed Trump Entertainment Resorts, before it again went bankrupt in 2009 after a missed $US53.1 million bond interest payment during the global financial crisis. Trump resigned as chairman and reduced his stake to 10 per cent.
Early this month the Trump International Hotel & Tower Toronto went bust, just four years after Mr Trump and his children cut the ribbon at its opening. He is not the developer or even an investor, but was paid for his name and management team.
As he and his children said in a CBS 60 Minutes interview on Monday, none of that matters any more. Some believe his bid for the presidency is simply his latest hubristic plan to gild his name and image.
Global markets are waiting to see whether the new president will carry out the campaign promises economists estimated would increase national debt by trillions of dollars. The President-elect claimed the cuts will pay for themselves by eliminating some deductions and credits, but both left-of-centre Tax Policy Center and the right-of-centre Tax Foundation say this is nowhere near true, and the scheme would cost $US9 trillion in revenue over the first decade.
The United States’ debt already stands at 75 per cent of gross domestic product. The only “advanced economies” with higher debt are Italy, Japan, and Portugal, according to the International Monetary Fund.
Ronald Reagan and George W. Bush both spent heavily on the military while drastically cutting income tax, each leaving the nation in such great debt their successors were forced to raise taxes back up again.
“He changed political parties five times. He’s an erratic character, he’s not bound by ideology. He’s a pragmatic wheeler and dealer, he could be very loose with the strings.
“The Federal Reserve will likely put the brake on Trump via interest rates.”