Election 2016: Amid all the depressing name-calling, mud slinging and character assassination in this election season, there are, believe it or not, serious issues. One of them is the vast expansion of government spending and taxes that a Hillary Clinton presidency would usher in.
Clinton has left the campaign trail littered with her ideas for bigger government and has proposed major increases in taxes to pay for it in part. A new report from the center-right American Action Forum says that 13 major new spending proposals from Clinton would “have a dramatic effect on the federal budget.”
How dramatic? The AAF says that Clinton’s various plans would boost taxes by $1.3 trillion over the next decade, but it would grow spending by an even larger $3.5 trillion. That’s an added $2.2 trillion in deficits for the next 10 years. As for public debt — that is, only the money that the government owes the public — it would nearly double, says the report, from $13.968 trillion today to $25.825 trillion in 2026.
We know, we know. Such recitations of numbers can have a numbing effect. You can only predict fiscal disaster for so long, and then people start to tune you out. But the threat is real — and the numbers are alarming.
The list of new spending ideas from Clinton is truly breathtaking, but in a bad way. For instance, she wants to spend $1.6 trillion on guaranteeing up to 12 weeks of paid family leave, $347 billion on child care, and $107 billion on “debt-free college.” Then there’s $66 billion for universal preschool, even though study after study shows the benefits of preschool to be negligible. But hey, it takes a village, and to say no to such feel-good projects makes you a big meanie.
The fiscal impact of all this spending will be ruinous. Under current law, the federal debt held by the public is expected to reach 85.6% — an already high level of debt that well exceeds the 70% or so that economists believe marks a troubling level for any nation. Under Clinton’s plans, however, federal debt soars to 93.5% of GDP, a potential disaster. Moreover, the resulting deficits will reach 5.7% of GDP, up from 2.5% just last year.
“A billion here, a billion there, and pretty soon you’re talking about real money,” the late, great Illinois Republican Sen. Everett Dirksen, who was Hillary Clinton’s senator for most of her youth, once reportedly said. Except he said it back in the 1960s, when a billion dollars was an almost inconceivable sum. Today, we’re talking trillions.
But these aren’t merely numbers. They are in fact a measure of the amount of money siphoned out of the highly productive private sector into the low-productivity public sector. As such, every dollar of potential private investment taken as taxes or borrowed by the government will act as a brake on the economy’s growth. One of the causes of today’s epic shift from 3% GDP growth to 2% GDP growth is a steep and continuing drop in business investment — the true engine of economic growth, productivity and higher wages for all — from the nonstop growth of government.
Higher government spending is a direct tax on growth. Nations that spend more inevitably grow more slowly. Those who vote for Hillary Clinton and all of her many ideas to spend more should know that they are voting for lower incomes, more poverty and fewer jobs.