Republican presidential frontrunner Donald Trump’s wide-ranging interview with the Washington Post’s Bob Woodward and Robert Costa, published Saturday, made news on many different fronts. From his prediction of a “very massive recession” to his description of himself as the “Lone Ranger” of American politics trump was, even for him, highly quotable.
But for people focused on fiscal issues, it was his claim that he would eliminate the federal debt – not the annual deficit, but the entire outstanding debt of the federal government – within eight years that really raised some eyebrows.
The Treasury Department calculates the nation’s federal debt at $19.3 trillion, although it could be as low as $13.9 trillion (if you eliminate debts the government owes itself, like Treasury securities held by the Social Security Trust Fund).
Trump, however, consistently describes the debt as being more than $19 trillion, so when he promises to eliminate the debt within eight years, it’s reasonable to assume that he is referring to the higher figure, which will be approaching $20 trillion by the time the next president takes office.
The reaction most people familiar with government spending and borrowing had to Trump’s promise was that it is utterly delusional.
First off, the annual US Gross Domestic Product is just under $18 trillion. Second, US government spending last year was $3.7 trillion. The idea that there is $2.4 trillion per year in excess funds lying around that the Treasury could use to pay down the debt over 8 years strains the imagination.
When Woodward and Costa pressed him on the issue, Trump promised that the difference would be made up in the form of better trade deals and economic growth. “I’m renegotiating all of our deals, the big trade deals that we’re doing so badly on,” he said.
The idea that the US can retire an economy-sized debt load in 8 years based on renegotiated trade deals and the few vague spending cuts Trump has hinted as is plainly absurd. So, on Sunday, Trump senior advisor Barry Bennett explained to NBC that the solution will be a massive sell-off of the 77,000 unused Federal buildings, property, and mineral rights. In 2014, NPR reported that the Office of Management and Budget estimated the annual cost of maintaining these buildings at $1.7 billion a year.
“The United States government owns more real estate than anybody else, more land than anybody else, more energy than anybody else,” Bennett said in an interview with NBC affiliate MSNBC. “We can get rid of government buildings we're not using, we can extract the energy from government lands, we can do all kinds of things to extract value from the assets that we hold.”
How much federal government lands and other holdings are worth are an open question. It’s still another question what they would be worth in the sort of fire sale Trump is apparently suggesting.
And yet another question is where that kind of money would come from. The idea that there is $19 trillion of uncommitted investment capital just hanging around in the US, waiting for federal lands and buildings to come on the market seems…a bit of a stretch.
There is, of course, a wide world of investors out there, many of whom would be more than happy to take title to…who knows…Yellowstone Park? But it’s not obvious that Trump, who has made blocking some immigrants from even entering the US, actually wants to be the president who sells off the country, piecemeal, to foreign investors.
Like his rapidly rotating stances on the abortion issue this week, it seems safe to expect that The Donald’s position on the federal debt will be changing in the coming days as well.