Senator Ted Cruz was on Morning Joe today and was asked about reconciling President Trump’s spending proposals with small government conservatism. The Senator said he wanted to see details before he offered an opinion. He did make a salient point about the federal debt and said it comes down to economic growth.
He’s right. Just doing some cursory research will bring up plenty of studies and white papers detailing the relationship between debt and GDP. Cruz is right that GDP grown under President Obama has been anemic. This is a NY Times piece in 2011 entitled, ‘Sure Cure for the Debt Problem: Economic Growth:’
Today, well — you know. We face the largest budget deficit the nation has ever known: $1.6 trillion, the equivalent of about 11 percent of our economy. And, whatever Washington does, many economists say the situation will grow only worse, particularly as Americans age and Medicare costs spiral higher.
But there is, in theory, a happy solution to our debt troubles. It’s called economic growth. No need to raise taxes or cut programs. Just get the economy growing the way it used to.
Joe Scarborough likes to brag about the “balanced budget” he helped bring about in the late 90’s, but the reality is, the budget came into balance, not because of any spending reductions, but because of increased tax receipts thanks to a strong economy.
It is going to be interesting when the Obamacare fight happens. Senator Cruz along with Senators Mike Lee and Rand Paul are demanding nothing short of a full repeal of the Affordable Care Act not “repeal and replace.” I am in complete agreement with that. But it will certainly be a tough battle. Cruz said repeal of Obamacare, regulatory reform and tax reform is key to the economic growth he says will help tame the debt.
Let’s see what happens.