Trump’s new plan to build the wall between Mexico is for us to pay for it, and then somehow make Mexico pay us back. Whenever the President asks Congress to authorize deficit spending, it includes exactly how that money – a loan from American taxpayers – will be repaid. But Trump’s plan is no different than how he repeatedly bankrupted his failed business ventures. Or put in more personal terms, it’s no different than how we all got ourselves into massive credit card debt, by spending money we don’t have and never will. It’s bad enough we do it, but his plan is fiscally inexcusable. We walk you through it below.
Trump has scapegoated undocumented immigrants from Mexico for nearly every problem you’ve ever experienced.
They steal your jobs. They steal your housing. They make you scared to go out at night. Watch out, they might rape your daughters and wife.
The only solution, he insists, to this made-up problem is a “tremendous wall” along the entire border with Mexico. At a conservative price tag of $14 billion, which we all know will triple before it’s even completed, he promised Americans throughout his entire campaign that Mexico would pay every penny.
But last week, his transition team leaked that he would ask Congress to pay for the wall. Trump then tweeted a number of condemnations of the media for the intense scrutiny they made of this about face.
Yes, his continual repudiation of the media for criticizing anything he does is repugnant.
Checks and balances are part of the fabric of our nation, and it is the moral obligation of the press to scrutinize the policies and backgrounds of our leaders because they work for us. Trump’s ridiculously thin skin and tit-for-tat hostile, humiliating, and abusive responses are atrocious. And he has already threatened to curb the constitutionally guaranteed freedom of the press. But that’s not the problem we’re reporting in this article.
Trump’s plan to pay for the wall is no different from telling your extended family you need a Maserati and they have to pay for it. After they all say no, you buy it anyway on a bunch of credit cards, arguing to all of them that they have to pay you back anyway. No one in their right mind would say that’s a bright idea.
America is already drowning in credit card debt.
According to the Federal Reserve Bank of New York, Americans carried $747 billion in credit card debt, averaging $16,061 per U.S. household. Add to that car loans, mortgages, and student loans and we are personally carrying $12.35 trillion in consumer debt or $265,500 per household. At that same time, median household income was $58,200.
In other words, if you are an average American, your total debt is about 4.6 times more than you make. And you owe 28 cents in credit card debt for every dollar you earn.
The Clearpoint credit counseling service suggests that your debt to income should never be more than 15% to be safe, while 20% is dangerous. And here are sporting 28% just in credit card debt!
To give you another sense where we stand, lenders figure that your total debt (mortgage, student loans, housing) should never be more than 36% of what you earn. It’s called the “back-end ratio.” If you’re an average American, your credit card debt is eating up almost all of that, creating a vicious spiral. The conclusion is inescapable: we have a huge problem with consumer debt.
Trump wants to create the same problem with “The Great Wall”
Americans got to our absurd level of consumer debt by not having the money to pay for what we bought. “I’ll get it next month,” we say, and the debt racks up. Emergencies aside, “but now, pay later” is irresponsible when we don’t already have the cash in hand.
In plain terms, this is exactly what Trump is demanding. That U.S. taxpayers foot the bill for tens of billion of dollars under the hope that he can convince Mexico to pay us back. Note two things. First, Trump has refused to provide the least shred of evidence that he can make them do it. Second, Mexico has already said, quite bluntly, that they won’t.
After their meeting in September, Mexican President Enrique Peña Nieto wrote on Twitter: “I repeat what I told you personally Mr. Trump: Mexico will never pay for a wall.” Former President Vincent Fox was more colorful a few days ago.
Trump has a decades-long history of huge business failures, caused by excessive spending on credit that was backed by other people’s money.
The New York Times published an eye-opening exposée on how he bankrupted his Atlantic City casino empire before it even opened, by using credit to spend money could never make back. It’s how he tanked all his failed projects, and there are many!
But Trump never learned the lessons we have through our consumer debt. We are the ones who pass sleepless nights as our credit card debt rises. We get harassed by collections agencies. Our wages are garnered. We lose our cars and houses. Trump, on the other hand, always spent other people’s money (billions of investor dollars), and skimmed millions as each project failed. So he has no notion of personal accountability when it comes to debt spending.
That is why his plan to spend first and try to get the money back later, is a fiscally inexcusable plan. The United States are not another Trump business venture. But his tweets make it crystal clear that he can’t grasp any of this. He is going to dogmatically push forward, consequences be damned. Only once again his pocket won’t feel the sting. We, the taxpayers, are now his investors, and we must not be duped into flushing our good money down Trump’s toilet.
Featured image from Flickr