The candidates for VP faced off last night in their one and only debate. I stayed up (again) to give you the lowdown
VP candidates Mike Pence and Tim Kaine had their one and only debate last night. I know what you’re thinking: who cares what the VPs have to say when you could just wait til next Sunday to Trump and Clinton claw each other’s eyes out again? Well, it turns out the VPs had some pretty important stuff to say on debt and social security. I got myself into gear with my pizza to give you the lowdown:
Debt
National debt was one of the first questions on the agenda—which was a big deal in 2009 and 2010, but hasn’t been talked about as much since. In her question, moderator Elaine Quijano pointed to a study by a nonpartisan organisation which said that both Trump and Clinton’s economic plans would increase the federal debt. But she didn’t really give much context for how much debt she was talking about.
Here’s a bit more info. The report says that over 10 years, Clinton’s plan would increase the national debt by $0.2 trillion ($200 billion). Over the same period, Trump’s plan would increase the national debt by $5.3 trillion ($5,500 billion)—a version we saw in the summer (and from someone who changes their mind as much as he’s known to, it’s worth taking an older version into account) would have bumped this up to 11 trillion. That means Trump’s plan would add over 25 times more debt than Clinton’s. Last year, the deficit—the amount we added to the national debt—was $439 billion. In that context, Clinton’s plan to add a $20 billion a year is hardly noticeable compared to Trump’s plan to add over $500 billion a year.
How’s Trump planning on adding so much debt? Basically, his plan is to increase economic growth. He'll do that by cutting taxes, which will massively increase national debt. But he, and many conservatives, think that in the long term, cutting taxes will boost growth, i.e. people will be getting richer, so they'll start paying more in taxes, and all that initial debt that was created will be eliminated.
Most economists are pretty skeptical that this will work though. (That being said, it’s also good to keep in mind that new isn't necessarily a horrible thing.)
Social security
Social security is another thing that’s historically been a big debate in American politics but hasn’t gotten a lot of play in 2016. Social security is basically America’s way of talking about its public pension system. Think of it like a giant pot of money. Pretty much everyone with a job pays into the pot (via taxes), and when you’re older you start getting regular payments from the pot to help you retire.
A lot of projections say the pot might run out of money in the near future if we don’t do anything about it. Tim Kaine proposed raising the payroll tax cap – i.e. the number above which you don’t have to pay any additional payroll tax.
Currently, if you earn beyond around $120,000, you don’t pay additional tax on your earnings above that. So someone making $200,000 only has to pay the tax on the first $120,000 they make. The idea is that you’re not disincentivized from making lots of money for fear of the taxman taking it away. Because everyone gets to take out the same amount when they’re older, no matter what they’ve paid in, a contribution cap keeps well-off people from paying way more into the pot than they’ll ever get out.
Kaine didn’t go into details about what exactly the Democrats want to do with this cap. The most straightforward thing would be to just increase it, so well-off people have to pay a bit more. But there’s also more complicated proposals on the table which would put an upper limit on the cap, after which tax would kick back in—so someone making $200,000 a year wouldn’t pay extra tax but someone making $50 million a year would.
What does Trump think about this idea? We’re not sure – Pence didn’t get much of a chance to answer. Kaine accused him of wanting to ‘privatize’ social security. Right now, all the money in the social security fund is invested in government debt, which is super safe but doesn't pay much . Some people want to invest that money in the stock market instead, which to critics would be considered ‘privatization’. Another proposal is to do away with the big common pot and give everyone their own retirement account, so whatever you pay in you get back out when you retire. That would be ‘privatization’ too.
Besides saying that a Trump administration would “meet our obligations to our seniors”, though, we didn’t get a great idea where the Trump ticket stands on all this. We’ll have to wait til Sunday—get ordering those pizzas, folks.
Here’s the transcript for the whole thing, with some moderate fact checking.
