Trump’s Rise Shows GOP Voters Less Worried About Debt

by Greg Ip,

Donald Trump’s rise marks the demise of Paul Ryan’s fiscally conservative approach to government spending and debt.

Paul Ryan became a Republican icon in 2011 with an ambitious budget devoted to lower tax rates, slowing the growth of social entitlements and, above all, “lifting the crushing burden of debt.” It became his party’s economic mission statement.

In Donald Trump, Republicans now have a presidential candidate who rejects virtually every element of that vision. He is erratic on taxes, won’t touch entitlements, and proudly calls himself “the king of debt.”

Mr. Ryan, now speaker of the House, has withheld support from Mr. Trump. He will meet with him Thursday in Washington to try and bridge their considerable differences, which span immigration, trade and attitudes toward Muslims.

But one consequence of their split is already clear. Mr. Trump’s rise shows that austerity and debt are spent as political forces in both parties. In a world of rock-bottom interest rates, big debts don’t matter like they used to. But those conditions could change in coming years, setting up a potential collision course between a Trump administration and financial markets.

Mr. Trump is the antithesis of Mr. Ryan, not because he has a different economic philosophy, but because he doesn’t have any. He does, however, have a keen sense of what voters want. Earlier this year, he blamed Mr. Romney’s loss on his choice of Mr. Ryan as running mate, “because he represented cutting entitlements.” Mr. Trump early on distinguished himself from other Republican candidates by promising to leave Medicare and Social Security alone.

The publicly held federal debt is now 74% of GDP and, the Congressional Budget Office says it will hit 86% in 2026 with current policies in place. Mr. Trump claims to be worried about the debt. Yet he’s promised to slash taxes, keep entitlements as they are, spend more on infrastructure and defense and deport 11 million illegal immigrants. Mr. Trump’s agenda is simply not compatible with stabilizing, much less reducing, the debt. By one estimate, Mr. Trump’s plans (including his tax cuts, which he says are negotiable) would boost debt to 129% of GDP by 2026.

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