Monday, 23 April, 2018

GOP tax law will add $1.9 trillion to debt: CBO

Trump tax cuts forecast to send US deficit to $1 trillion in 2020 CBO Predicts Persistently Large US Federal Deficit in Next Decade
Kim Reese | 12 April, 2018, 00:52

The report released on Monday was the CBO's first comprehensive fiscal and economic outlook since the tax and spending legislation enacted by the US Congress late past year.

The report paints an unrelentingly bleak picture of the federal deficit, predicting it will hit $804 billion this year, rise to just under $1 trillion for the upcoming budget year and permanently breach the $1 trillion mark in 2020 unless Congress stems the burst of red ink.

The agency also said that if Congress were to cancel the expiration of individual tax rate cuts and raise discretionary spending again after the budget deal expires in 2020, "the result would be even larger increases in debt". At the same time, the long-term budget forecast counters the GOP's arguments that tax cuts will pay for themselves through economic growth.

Net outlays for interest paid on federal debt are projected to roughly triple what they are this year in nominal terms and roughly double as a percentage of GDP, according to the CBO. Now they are perfectly comfortable jacking the deficit back up to recession-crisis levels, merely because they want to hand out tax cuts to owners of wealth while increasing defense, and without forcing their constituents to bear the cost of the necessary trade-offs. As deficits accumulate, debt held by the public rises from 78 percent of GDP, or $16 trillion at the end of 2018 to 96 percent of GDP, or $29 trillion by 2018. Those surpluses turned to deficits after tax cuts under President George W. Bush, as well as sharp increases in military spending for the wars in Afghanistan and Iraq.

Chicago Cubs home opener postponed due to rain
Leading the way in hitting for the Cubs coming into this week was Kris Bryant with 12 hits, six RBI, two homers and five runs. Javier Baez is starting to come around at the plate, driving in three runs with four walks in his last three games.

A new report warns that the United States is heading for $1 trillion annual federal deficits, and the Congressional Budget Office says that's going to radically raise the nation's debt in just a decade. The White House is also likely to propose rolling backing some of the domestic spending increases in last month's government-wide funding bill. Deficits can snowball, as larger deficits require larger interest payments, pushing the government to borrow more and more money to close the gap.

"We expect interest rates to accelerate faster", said CBO's Hall.

"It's going nowhere", said Sen.

Republicans treated deficits of this scale as risky portents of civilizational collapse during Barack Obama's first term, when the economy was recovering from the greatest financial crisis in three-quarters of a century. Publicly held USA debt will total $28.671 trillion by the end of 2028, amounting to over 96 percent of US gross domestic product (GDP) that year. But the CBO projected Monday that the bill would boost economic growth 0.7 percent over a decade - not enough to keep it from adding to the deficit.

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