In his speech to the Libertarian National Convention, Donald Trump promised to do libertarian things if libertarians gave him their vote this November. On July 31, Trump posted on Truth Social, in all caps of course, "SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!" Is this a way for Trump to appeal to libertarians? Well, let's do some arithmetic. Right now, seniors making less than $44,000 (for a couple) pay taxes on only one half of their social security income. Inferentially, that is the portion of Social Security that was paid for by their employers, from which no tax was withheld. So, no taxes on Social Security means no taxes on that income ever. Right now the minority of seniors making more than $44,000 can be taxed on up to 85% of their Social Security benefits. So that extra 35% amounts to double taxation on the same income.

Libertarians are all for lowering and, if possible, eliminating taxes. So, does that make Trump's proposal a libertarian proposal? Well, not really. You see, Trump and, for that matter, Harris both ignore the elephant (or donkey) in the room. You see, so-called mandatory spending, mostly social spending like Social Security, Medicare and Medicaid along with interest on the national debt account for 70% of all Federal spending. All taxes combined only cover 76% of Federal spending. That means the 24% deficit has to be covered by even more borrowing. Interest is already more than 10.5% of Federal spending, more than Medicaid. Meanwhile the biggest lenders to the U.S. government are reducing the amount they are willing to lend us. China has reduced its lending to the U.S. by 40% in the last 10 years. If you want to know why, see Trump tariffs and Biden's outright theft of U.S. Treasury debt held by Russia. Other countries are figuring out that the Treasuries they hold may be stolen from them if they dare have a different foreign policy than the one prescribed to them by Washington.

In short, the willing lenders to the U.S. are going away. That leaves the Federal Reserve. They can always just create new money and lend that. We've seen, in the last few years, that the eventual result of that is rip-roaring inflation. Inflation is just a tax going by another name. The only way tax cuts can be beneficial is if they are accompanied by a corresponding (or larger) spending cut. Neither Trump nor Harris is going to be proposing anything like that anytime soon.

I've thrown a lot of numbers at you so let me recap. Interest on the debt and mandatory social spending make up 70% of what the Federal government spends. Taxes only account for 76% of what the Feds spend. That means that all of defense spending and most spending for federal courts and regulators and everything else is financed by borrowing.

The only way a tax cut, any tax cut, can be considered libertarian is if the budget is already balanced and the cut is matched by an equal spending reduction. Only one Presidential candidate is proposing anything close to that. That would be Libertarian Presidential candidate Chase Oliver who proposes reducing Federal spending to pre-covid 2019 levels. That's this week's Report From the Fields. I'm Richard Fields. See you again next week