Historically, Republicans project the image of containing public spending, keeping the public debt low, and creating more wealth for society. From Reagan to Trump, history shows that spending for defense, intelligence, domestic security goes through the roof, at the same time that taxes of the rich are cut while indirect taxes paid by the mass consumer rise, and corporate subsidies replace social spending.
What has followed is a sharp rise in the public debt at the same time there is wealth concentration which leaves more people in or near the poverty level. When Trump won the election in 2016, government spending hovered around $4 trillion, with a $500 billion deficit, money borrowed from various domestic and foreign sources, including America’s largest trading partner China. In 2019, government spending was about $9 trillion.
Because Trump and the Republicans gave back $2 trillion to the richest 1%, revenues were $3.5 trillion or the same as in 2016. This left a deficit of $5.5 trillion. By 2019, the Republican government was spending 150% more than the IRS was collecting, compelling the FED to increase the money supply to keep rates low amid underlying monetary inflation. Driven by Wall Street, FED policy also caved to Trump’s encouragement of a low-interest regime as a means of feeding the “financialization”- driven US economy.
The result has been the dollar’s value falling against other currencies, held in check somewhat by the fact that the dollar is a reserved currency and other countries adjusting their currencies so as to maintain fair terms of trade. US debt $27 trillion in October 2020, or 136% of GDP as compared with $20 trillion or 104% of GDP in 2017, representing a 32% rise in four years, largely because of the $2 trillion in tax cuts to the richest 1% in 2017, combined with corporate welfare subsidies, rising defense budget and economic slump owing to the pandemic.
Under Trump, not only has the US experienced a sharp rise in budgetary deficit and public debt, but also in the largest wealth concentration in its history. This while the poverty rate for 2020 is 10%, expected to rise much higher in 2021 as in the rest of the world, amid rental evictions, home foreclosures, and small business bankruptcies. For whites, the poverty rate is around 7% percent, while for Blacks at 16% and Hispanics 14%. These rates will rise sharply in 2021, as it is very likely that living standards for the bottom half of the population will continue to drop.
In spite of these realities in the American plutocratic system, 73,000,000 people voted for Trump. Republicans gained seats on the “down ballot” in the House of Representatives and at the state level, indicative that right wing politics has deep and long roots beyond Trump Republicanism.
Considering the immense challenges of inequality and rising poverty that in-coming President Biden will be facing, his solution is the delusional 1970s bipartisanship method of governing. In essence, this translates to using Republican compromise strategy as leverage to marginalize the progressive policy agenda geared toward social justice that Biden confuses with appointments of people of color to key Cabinet positions.
I fully expect that in the next congressional election in 2022, Republicans will win both houses of congress. By 2024, if there is general stagnation of living standards for the vast majority, as I expect there will be, it is entirely possible that someone more open to Fascism than Trump, without the boisterous personality of Trump, will emerge to lead the Republican Party.
Jon V. Kofas, Ph.D. – Retired university professor of history – author of ten academic books and two dozens scholarly articles. Specializing in International Political economy, Kofas has taught courses and written on US diplomatic history, and the roles of the World Bank and IMF in the world.