The headline from the Associated Press yesterday afternoon probably raised a few eyebrows: "Treasury says April-June borrowing will be a record $2.99T." The report added:
The economic paralysis triggered by the coronavirus pandemic is forcing the U.S. Treasury to borrow far more than it ever has before -- $2.99 trillion in the current quarter alone. The amount is more than five times the government's previous record borrowing for a quarter, $569 billion, set in the depths of the 2008 financial crisis.
It's likely that many Americans will see figures like these and see it as a problem. After all, borrowing roughly $3 trillion over a three-month period sounds almost comically excessive.
It's not. The United States has the world's largest economy; it's facing the worst economic conditions since the Great Depression; and it can borrow practically unlimited resources easily. When a debt load becomes a problem for a country, there are certain indicators -- rising interest rates and high inflation, for example -- which in our case have not emerged. It may seem counterintuitive, but borrowing many trillions of dollars right now is the smart and responsible thing to do.
But it's against this backdrop that the broader issue is starting to draw some White House attention. During the president's latest Fox News event, for example, an anchor reminded Donald Trump that the nation's debt now stands at $25 trillion and counting. He replied, "Well, we're going to cut.... We're going to cut back very substantially."
He made similar comments in an interview last week, when a conservative radio host asked whether the president has a debt-reduction plan. "I do, I do," Trump said, adding that the size of the national debt "bothers" him, "but we're going to get out of it."
A Reuters report on the comments added that the president "did not provide details" on how he intended to address the debt.
Given the circumstances, I don't seriously expect the 2020 presidential campaign to focus much on fiscal issues, but if Trump is vowing to cut spending "very substantially" if given a second term, Americans would be wise to wonder what the president has in mind for the chopping block.
Postscript: I'd be remiss if I neglected to mention that Trump's rhetoric related to the national debt has long been incoherent and hypocritical. I'm not at all sure he's even familiar with the meaning of any of the relevant words or phrases.