by Countable | 4.10.18
The Congressional Budget Office (CBO) published their first economic forecast since the passage of tax reform at the end of 2017. Though the report points to some initial economic improvements due to economic growth and increased employment rates, it also projects the deficit will grow rapidly unless Congress changes course. Here are highlights of the report:
The annual deficit will grow by $139 billion this year, to $804 billion. That’s $242 billion more than the office’s forecast in June 2017.
The overall deficit will grow to $33 trillion by 2028.
Government debt will total 96 percent of gross domestic product by 2028.
The tax overhaul specifically will only grow the economy by 0.7 percent from 2018 to 2028, while adding $1.8 trillion to the deficit.
Annual average economic growth will be 1.9 percent over the next ten years, though growth in this year should be 3.3 percent and 2.4 percent the next. Then rates will drop precipitously.
By 2023 interest costs on government debt annually will exceed the entire budget of the Pentagon. By 2028 interest costs will reach $915 billion, triple that of 2017.
The tax overhaul will add 1.1 million jobs over the next decade, and wages and salaries will increase annually by an average of 0.9 percent.
The tax overhaul will increase interest rates by half a percentage point and strengthen the dollar, though that would likely increase the trade deficit as Americans buy more imports.
CBO Director Keith Hall warned the New York Times that changing course must happen sooner rather than later:
"The longer you wait, the more draconian the measure have to be to fix the problem."
Are you concerned about the swiftly rising federal deficit, or not? What do you think the remedy or remedies are to this problem?
Tell us in the comments what you think, then use the Take Action button to tell your reps!
— Asha Sanaker
(Photo Credit: Congressional Budget Office)
Written by Countable