US Government’s Deficit to Reach $1 Trillion by 2019!
The current administration’s tax cuts combined with the highly expensive spending bill will send the budget deficit up sky high. According to the Congressional Budget Office, the deficit will reach an astounding $1 trillion by next year.
The CBO reported last Monday that due to different tax and spending bills, it will reach $800 billion this year, and then up to $1 trillion for next year’s upcoming budget. CBO further added that the economic growth because of the tax cuts will add 0.7 percent on average to the United States’ economic output over the incoming decade. These effects, however, are but a measly respite, and will barely offset the deficit that has been brought because of the tax cuts, despite the administration’s promise that the cuts will pay for themselves.
Another prediction that the CBO has is that the economic growth will drop the unemployment rate to below 4%. The report, all in all, paints a very depressing picture though, which consists of relentless federal deficits which might reach $1trillion until 2020 unless Congress is able to do something about it.
The government will borrow 19 cents out of every dollar this year, and if the breach isn’t stopped, the deficit would grow to a staggering $1.5 trillion by 2028. There is even a possibility that it would reach $2 trillion if the tax cuts are fully-extended and if the White House doesn’t cut on spending.
Republicans’ Response to Bloated Deficit
Many people have hoped the government would have something in mind to at least regulate the ongoing problem, as it might get out of hand quickly. Many hopes have been crushed though, as incumbent Republicans seem to have no plan of action in order to combat this incoming threat.
It seems the Republicans in Washington have mostly lost interest in combating this deficit, and the issue has been shuffled back and forth so much that it has lost priority and prominence in recent years.President Trump has already ruled out lowering the budgets on Social Security and Medicare, and Capitol Hill Republicans are not taking any steps against the deficit ever since Donald Trump has taken office.
However, conservatives in Washington have made their statements heard. Because of their complaints regarding the lack of action on the $1.3 trillion, catch-all spending bill which went way past the limits by over $300 billion on this year’s budget and the next, House GOP leaders have already scheduled a vote within the week.
This vote is to choose whether to go with the proposed Constitutional amendment, and it will require a balanced federal budget. However, many people are skeptical and they say the vote will surely fall short of the required two-thirds majority in order for the motion to pass.
It is also forecasted that the White House will propose a rollback of some of the domestic spending increases in the government-wide funding bill that were seen last month. This is only a band-aid in order to stem the bleeding though, as it seems that the proposals, if passed, will still not shrink the deficit by much.
What the Future Holds?
Economics experts are of the opinion that if deficits will continue to rise which, in turn, will make the national debt only grow, government borrowing will crowd out private lending, and this also will make interest rates skyrocket. If this does come to pass, the government will have to pay much more in order to finance the more-than-$14 trillion debt in the Treasury that is held by investors.
People are now calling on the current administration to focus on this issue, because if it is just left to pass, it will be sure to cripple the US economy, and in turn, will make the nation suffer. Though employment will go up, and there are some ideas being implemented, it is obviously not enough, and only time will tell how the people will suffer because of the current government’s inaction.
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