The Art of Economic Malpractice

Although everyone talks about President Trump's first 100 days, the crucial time lies ahead when Republicans and Democrats try to grapple with problems they created over the past 50 years

Everybody talks and writes about President Donald Trump's first 100 days. I'm more interested in the next 100 and the hundred after that.

President Franklin Roosevelt began the retrospective 100-day tradition with a flurry of legislation to pull the nation from an economic depression. He set the stage for many initiatives we continue to rely on to keep the country and its citizens afloat.

Photo by Mike Stoll Unsplash

Trump, in contrast, largely bypassed Congress and used his first 100 days to blitz America with executive orders on everything from immigration to tariffs -- import taxes that weakened the robust economy he inherited from President Joe Biden.

Soon, though, Congress must take up budget resolutions passed by the House and Senate to provide a framework for the government's tax, spending, and borrowing needs that could have grave consequences relatively soon for America's future.

Tradition tells us that many readers avoid stories about budgets. They are usually tedious, full of numbers, and complicated. I know. I spent years writing them as the Chicago Tribune's chief economics correspondent in Washington.

Readers should pay special attention to his year's budget, though. President Trump hopes to restructure the global economic and political order, starting with resolutions Congress narrowly passed just weeks ago.

The documents contain the usual Republican or Democratic sleights of hand designed to sidestep crucial issues the nation faces. More than any budget I've ever covered, this one raises fundamental questions about what kind of country we aspire to be.

Let's get the budgetary nuts and bolts out of the way. The House passed its budget in February 2025 on a narrow 217 to 215 vote. The Senate followed with its budget resolution in April by an equally tight vote of 52 to 48.

Both bills are budget "resolutions" creating a blueprint for federal spending, revenues, deficits, and debt over the next decade. They merely set targets for Congress to hit by following up with individual appropriation bills in the coming months for things like defense spending or how much revenue to devote to programs for the environment, health and welfare, and other important issues. Ideally, Congress should adjust the appropriation bills to the political realities and pass legislation that aligns with the resolutions' targets. The bills are supposed to be signed by the President on October 1, the start of the fiscal year.

That's how things are supposed to work. Over the past fifty years, Congress has passed bills that were supposed to hit those targets only five times since the current system started in 1977.

Instead, the lawmakers have adopted a sloppy, messy system in which the entire federal budget gets lumped into "continuing resolutions" or huge "omnibus" spending bills that often are passed at the last minute. The session usually features high-pressure late-night sessions where Democrat and Republican legislators vote to spend hundreds of billions of taxpayer dollars on programs more familiar to well-heeled lobbyists than most members of the House and Senate.

Legislators play many games in the give-and-take over the appropriation bills. They usually don’t make much real progress, though, and the result is a mushrooming federal debt triggered by Congress's tendency to consistently spend more money than it takes in, borrowing the rest it needs to cover the nation's bills. In other words, they run budget deficits more often than not.

You will hear many excuses about why we have come to rely so heavily on deficits. Technical issues such as budget baselines or economic assumptions forecasting how things will turn out, will surface. Most of that is BS. The underlying fact is that we, as a nation, Republican and Democrat alike, spent more than we raised from taxpayers forty-five times over the past fifty years.

The last President to run a budget surplus was Bill Clinton. He ran surpluses from 1998 to 2001, a year that the government took in $128 million more than it spent thanks to a combination of tax increases, spending restraint, and a healthy economy.

Clinton's predecessors and successors didn't do as well in husbanding the nation's resources. As a result, America now owes about $28 trillion to the public, which includes individuals, banks, businesses, and foreign governments who finance the debt by purchasing U.S. Treasury bonds, long considered the safest investment in the world.

So, as President Trump and Congress take up budget resolutions that call for an extension of tax cuts Congress passed in 2017, the nation's accumulated debt stands at about 98 percent of the output of the nation's entire economy.

To be clear, Democrats and Republicans created this debt bomb. President Trump faces a potentially explosive situation, though. He is starting his second term owing the nation's creditors an amount of money that is nearly 100 percent of the economy, or the total value of the goods and services produced by the nation's workers and businesses. Franklin Roosevelt was the only other President to flirt with similar debt levels because he needed vast sums to finance World War II and drag the nation out of the depression.

The second Trump administration is on the threshold of creating an unsustainable level of debt that could have crushing consequences.

When President Trump started his first term in 2017, the nation's debt stood at 77 percent of America's entire economic output. By the end of Trump's first term, the debt rose to around 100 percent of the economy's output, a jump of just under 30 percent, mainly due to tax cuts that favored America's wealthiest companies and individuals.

Now, the budget resolutions recently passed by a Congress under the thumb of the President include an extension of the 2017 tax cuts that lowered the corporate rate from 35 to 21 percent and awarded the top five percent of America's households (those making $450,000 a year and more) with 45 percent the benefits. Only he is beginning his second term with a federal debt that stands at 98 percent of the value of the goods and services produced by the nation's economy.

If the tax cuts Trump and Congress want to extend this time around raise the federal debt burden by the 30 percent that occurred in Trump's first term, the national debt – other things being equal -- will soar to around 128 percent of the nation's economic output, which is approaching levels considered unsustainable by numerous organizations that keep score of these types of things.

This is a conservative estimate, by the way, because the debt owed to the public doesn’t include the money the government owes to federal trust funds like the one for Social Security. Including those totals would add another $10 trillion to the debt.

So, what happens when debt levels become "unsustainable?" Investors begin balking at buying the Treasury securities the nation uses to finance its funding shortfalls. In such a scenario, some borrowers are crowded out of debt markets, and interest rates will rise. America already spends more on federal debt interest than it spends on defending the country. Since gun-shy investors would not buy as many Treasury bonds, they wouldn't need as many dollars, threatening the greenback as the world's reserve currency. The federal government won’t be able to get loans on such friendly terms and may find borrowing to fund services to its citizens far more expensive and elusive.

President Trump vows he will change the fiscal playing field and cut the debt by reforming global politics and making our allies pay their fair share for things like defense. He makes some legitimate points. But it’s doubtful the sweeping tariffs he wants to enact can, on balance, generate enough new revenues to compensate for the tax cuts he advocates.

As events of recent weeks reveal, Trump is already carving out tariff exemptions for aggrieved industries and nations. He calls it the art of the deal. It's the art of economic malpractice. It’s becoming increasingly clear that his tariffs will probably shove the economy into a recession that will make the nation’s problems even worse.

The architects of the budget resolutions pledge to cut spending to rein in the deficits—we've heard that before. They vow not to cut sacrosanct programs such as Social Security, Medicare, or Medicaid, the health program for citizens of limited means. No one wants to cut defense spending, either, and the nation must pay the $2.6 billion a day we owe for interest on the federal debt for fiscal 2025.

All those programs represent 75 percent of the federal budget. We've already seen the adverse reactions of taxpayers to the slash-and-burn tactics of further spending cuts by the Department of Government Efficiency, led by Elon Musk, now marooned at Tesla, the troubled electric car company he runs. So, where do we go to make up for the reduced revenue caused by the extension of the tax cuts and some more goodies that will likely be tacked on during budget negotiations? The cuts implemented by DOGE are only a fraction of total federal spending.

Restoring sanity to the nation's economic policy is not impossible. President Bill Clinton ran four consecutive budget surpluses. When he took office, the nation had a deficit of $290 billion. He ran surpluses between 1998 and 2001 by combining tax increases targeting the wealthy, reduced defense spending following the collapse of the Soviet Union, spending restraints, strong economic growth during the dot-com era, and increased revenue from capital gains on stock sales and rising salaries. There was even talk about the implications of a country that would retire all of its debt.

President Clinton enjoyed a bipartisan spirit absent from the current political arena that is characterized by a President with an authoritarian bent and a narrow-minded Congress dominated by a minority of a minority party that seems to hate the federal government.

There’s no question that we face troubles that could have dire consequences. But answers to our future troubles are not that elusive, either: They lie in the recent past.

—James O’Shea

James O’Shea is a longtime Chicago author and journalist who now lives in North Carolina. He is the author of several books and is the former editor of the Los Angeles Times and managing editor of the Chicago Tribune. Follow Jim’s Five W’s Substack here.