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There is math, there is fantasy math, and then there’s Donald Trump’s economic math

Republican presidential candidate Donald Trump walks out to speak during a campaign event in Wisconsin on Sunday. (Photo by Jabin Botsford/The Washington Post)

For a moment, let's take Donald Trump's economic promises seriously.

Trump says he can pay off a $19 trillion national debt within eight years as president. He says he can do this while cutting taxes. He has not detailed any substantial cuts he would make to federal spending, so what he is really making is a growth argument — that he could supercharge the economy, creating sufficient budget surpluses to retire the debt. "The power is trade," he told the Post in an interview last week. "Our deals are so bad."

We ran some calculations to determine just how powerful that effect would need to be in order to make Trump's math pencil out. How fast, we wondered, would the U.S. GDP need to grow to produce enough tax revenue to pay down the debt?

The answer is likely somewhere between 13 and 24 percent — every year. He would need to at least double the size of the U.S. economy in eight years, and possibly to quadruple it.

Such growth is, to put it mildly, inconceivable.

It is at least triple the 4 percent rate that former candidate Jeb Bush promised, controversially, that he could achieve as president.

On the low end, 13 percent growth is double the annual growth that forecasters expect next year in China, a still-industrializing country. On the high end, 24 percent is well above the fastest recorded economic growth in modern America, 19 percent, which came in 1942 as the nation entered World War II.

The bizarre optimism in Donald Trump’s theory of the economy

It seems unlikely that the Federal Reserve would allow anywhere close to that rate of expansion. In America today, double-digit growth would almost certainly be accompanied by rapid inflation, which the Fed would counter by raising interest rates, thus choking off growth.

But it is, nonetheless, the growth that Trump would need to make good on his debt-elimination pledge, according to calculations by The Post using a variety of assumptions about tax revenues and federal spending levels.

Low end 

First, we calculated how much growth would be needed if Trump went on a drastic debt-repaying spree. This assumes Trump and Congress could agree to freeze federal spending at current levels, and that there would be no reduction in tax revenues as a share of the economy. The federal government would continue to take in about 18 percent of gross domestic product in taxes, using any budgetary surpluses to pay back the national debt.

Such a plan would leave government programs unable to keep pace with increased costs of living, or with a growing and aging population. It would force large cuts in services and safety-net spending. This scenario is particularly hard to square with Trump's pledge to maintain Social Security benefits at current levels as the baby boomers retire. Bear with us here.

If Trump somehow pulled that off — maintaining current levels of taxation as a share of the economy, freezing government spending and funneling every surplus dollar toward paying down the debt — the economy would still have to grow at about 13-14 percent annually in order for him to pay down the debt in eight years.

High end 

The required growth rate rises if we hold Trump to his other economic policy promises, which include slashing taxes and preserving popular federal programs like Social Security.

The non-partisan Tax Foundation estimates that if Trump's tax plan took effect, federal tax collections would average about 13 percent of GDP during his presidency, down from 18 percent currently. The Congressional Budget Office has realistic projections of what the federal budget will look like in the next decade as it grows to accommodate more people drawing on Medicare and Social Security.

Throwing those numbers into the calculation, the economy would have to grow 24 percent to 25 percent a year for there to be enough surplus for Trump to pay off the debt. To put this in perspective: GDP in 2015 was about $17 trillion. In order for Trump's budget math to make sense, the economy would have to more than quadruple in eight years. It would have be over $90 trillion by the end of Trump's term.

(Those figures are all expressed in constant 2017 dollars, which means they assume a "normal" rate of inflation. As we mentioned before, there's almost no way the United States could engineer growth that fast without unleashing abnormally high inflation. High inflation would theoretically help pay off the debt, by the way, but Trump argues for an end to "easy money," which we take to mean he wants to keep inflation low.)

All of this is enough to cause tax policy experts to speak in terms of science fiction. "It's not consistent with historical experience," said Alan Cole, an economist at the Tax Foundation who helped model Trump's tax plan. "It's more consistent with a world where we're hiring butlers for our vacation homes on Ganymede."

Ganymede is a moon of Jupiter.

More from Wonkblog:

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Really rich people are suddenly paying quite a bit more in taxes

Economic and racial anxiety: Two separate forces driving support for Donald Trump

Republican presidential candidate Donald Trump met with The Post's Bob Woodward and Robert Costa to discuss his campaign. (Video: The Washington Post)
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