December 9, 2019 09:59 AM RSS

CBO Warns Ballooning National Debt Driven by Trump and GOP Tax Cuts Could Hurt U.S. Economy Cause Economic Crisis

  • Wall Street Rebel | James DiGeorgia
  • 06/27/2018 2:52 PM
CBO Warns Ballooning National Debt Driven by Trump and GOP Tax Cuts Could Hurt U.S. Economy Cause Economic Crisis
 

According to a new report from the nonpartisan Congressional Budget Office as the latest review shows the national debt is on track to almost double as a share of the economy over the next 30 years. 

Federal debt is currently equivalent to 78 percent of the country's annual Gross Domestic Product, with the report estimating it will rise to 100 percent of GDP by 2030 and 152 percent by 2048.

In fact, U.S. Federal share of debt if nothing is done will surpass records set during World War II. 

The CBO report is an annual long-term budget outlook that examines rising health care costs and entitlement spending to account for aging Baby Boomers as the primary culprit. While, discretionary spending, by contrast, is expected to remain steady and even shrink in coming years.

The budget picture has dramatically worsened since Trump and Republican lawmakers not pushed through tax cuts for the rich, they made the tax cuts permanent. These tax cuts are expected to reduce revenue by $1.8 trillion through 2028 and more afterward if other expiring provisions are made permanent.

The Congressional Budget Office Report is clearly showing ongoing deficits have the potential to create huge fiscal problems down the road …

"Large and growing federal debt over the coming decades would hurt the economy and constrain future budget policy," the report reads.

"The amount of debt that is projected under the extended baseline would reduce national saving and income in the long term; increase the government's interest costs, putting more pressure on the rest of the budget; limit lawmakers' ability to respond to unforeseen events; and increase the likelihood of a fiscal crisis."

Trump's thinking on the deficit has been inconsistent and reckless. As a candidate, he pledged not to cut major entitlement programs, but later reversed his position on Medicaid and Social Security disability benefits, both of which he and GOP have and continue to want to reduce.

In interviews, Trump has stressed that it was a good time to borrow to finance various domestic priorities like infrastructure and that he would quickly eliminate the national debt.

We at Wall Street Rebel continue to warn the tax cuts are not the golden ticket to economic prosperity. Cutting Social Security, Medicare and Medicare to pay for the tax cuts passed is a denial of the reality that literally tens of millions will go berserk if those cuts reach the House of Senate floors for votes. If the GOP and Trump attempt to effect cuts before the 2018 midterms the Blue Wave we’ve seen around the country – with 46 Republican State and National seats flipping during special elections – could turn into a Blue Tsunami.  

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