Tag: national debt

Federal Debt Could Spike Trump’s Big Economic Promises

Buck Banks

Trumponomics Watch

The Associated Press: Donald Trump has big plans for the economy — and a big debt problem that will be a hurdle to delivering on them.

Trump has bold ideas on tax cuts, tariffs and other programs, but high interest rates and the price of repaying the federal government’s existing debt could limit what he’s able to do.

Not only is the federal debt at roughly $36 trillion, but the spike in inflation after the coronavirus pandemic has pushed up the government’s borrowing costs such that debt service next year will easily exceed spending on national security.

The higher cost of servicing the debt gives Trump less room to maneuver with the federal budget as he seeks income tax cuts. It’s also a political challenge because higher interest rates have made it costlier for many Americans to buy a home or new automobile. And the issue of high costs helped Trump reclaim the presidency in November’s election.

“It’s clear the current amount of debt is putting upward pressure on interest rates, including mortgage rates for instance,” said Shai Akabas, executive director of the economic policy program at the Bipartisan Policy Center. “The cost of housing and groceries is going to be increasingly felt by households in a way that are going to adversely affect our economic prospects in the future.”

National Debt to Rise to 98% of GDP by 2030

Buck Banks

98%

“Sustained federal budget deficits and debt will hit the highest levels since World War II over the next decade, according to a Congressional Budget Office report,” the Wall Street Journal reports. “The government will spend $1 trillion more than it collects in 2020 and deficits will exceed that amount every year for the foreseeable future. As a share of gross domestic product, the deficit will be at least 4.3% every year through 2030. That would be the longest stretch of budget deficits exceeding 4% of GDP over the past century. … Debt held by the public will be 81% of GDP this year and is projected to reach 98% by 2030.”

Federal Debt Ballooning

Buck Banks

78%

“The nation’s federal debt is now projected to balloon to ‘unprecedented levels’ over the next 30 years, if policymakers fail to change laws, potentially pushing the country into the risk of a ‘fiscal crisis,’ the nonpartisan Congressional Budget Office said in a new report Tuesday,” CNN reports. “Federal debt is expected to rise from 78% of GDP in 2019 to 92% percent in 2029 and 144% in 2049, the most ever in history.”