Financial Ruin

I've said many times here before, when a Republican criticizes Donald Trump, that's someone worth our attention. To that end, a Republican former governor and member of Congress wrote a withering op-ed about the President in yesterday's New York Times worth noting.

The piece (link here) is titled "Why Do My Fellow Republicans Make Excuses for Trump's Deficits?" with the more provocative deck title of "He is driving the country to financial ruin. And his own party is letting it happen."

Debt and deficits are necessary during economic downturns to speed an economy toward recovery. That's why President Obama used them during the financial crisis at the beginning of his presidency. He then turned away from them as the economy recovered.

Under Trump, however, with the economy still expanding (but at a slower rate), he and his GOP enablers have exploded debt and deficits to record highs. That makes utterly no sense economically. It's a binge that will cause a particularly painful financial hangover in the intermediate future.

Worse still, the next time the economy hits a recession, which is inevitable, the already crippling debt will weaken the usual monetary tools needed to speed a recovery, thereby prolonging the downturn.

Trump's reckless budgets also underscore Republicans' whopping hypocrisy: they criticize debt when it's used to shore up a sagging economy in recession, a necessary tool, yet they look the other way when it's used at a much larger pace when it's utterly unneeded.

This will not end well. It could result in runaway inflation. It could result in economic stagnation. Or worse, it could collapse real growth, bring on a serious depression, lead to default, and thus push the American economy off a cliff.

Argentina's economic history offers a good lesson in how a strong economy can be destroyed with the sorts of reckless policies Trump has enacted with the GOP's health. From 1880 to 1930, the country experienced phenomenal economic growth, some of the highest ever recorded in human history.

Thereafter, the country's leaders made a series of economically disastrous decisions that pushed the economy off a cliff. As a result, the economy has never recovered to the levels seen nearly a century ago.

Something of the same could happen to the United States. Some fiscal roadmaps are so disastrous that they permanently cripple an economy. Trump seems determined to go down that road. The question is why.