Critics across the political spectrum agree that the massive spending deal President Trump signed Friday marks a huge shift in the fiscal environment in Washington.
Heather Long and Jeffrey Stein of The Washington Post frame the situation this way: “The deal represents a sharp break from the era of austerity and government restraint, which began roughly six years ago when Republicans forced President Barack Obama to accept rigid budget caps that limited federal spending for a decade.”
Some will celebrate the shift while others will decry it, but it’s pretty clear that we are entering a new era as far as spending and the deficit goes.
Writing at Forbes Friday, budget expert Stan Collender says the “new normal” will be defined by:
- Higher interest rates resulting from increased government borrowing
- Rapidly increasing borrowing costs for the government
- Permanent trillion-dollar deficits that will be very hard to eliminate.
One result of these conditions is that it will be nearly impossible to achieve a balanced budget, to the point that it will cease to be even considered. And the political groups pushing for fiscal restraint, Collender says, could well find themselves sidelined.