The Era of Fiscal Austerity Is Over. Here’s What Big Deficits Mean for the Economy.
- 6 years ago
The Era of Fiscal Austerity Is Over. Here’s What Big Deficits Mean for the Economy.
“If you look at conventional measures, unemployment looks really low,
but on the other hand if you look back to what we used to think of the potential of the economy a few years ago, we may have some room to grow.”
The public debt was already on track to rise relative to the size of the economy before the new tax
and spending deals; now it will probably rise faster.
ratio would rise to 91 percent in 2027, from 77 percent in 2017.
hasn’t updated those numbers to reflect the new tax and spending legislation, but the Committee for a Responsible Federal Budget estimates
that it will turn out to be between 99 and 109 percent, depending on whether provisions of the tax law are allowed to expire as they are scheduled to.
A budget deal passed in the early hours of Friday morning includes $300 billion in new spending over the next two years for all sorts of government programs
and $90 billion in disaster relief, without corresponding cuts elsewhere in the budget.
When the Congressional Budget Office last forecast the nation’s fiscal future in June, it
projected a $689 billion budget deficit in the fiscal year that begins this coming fall.
Taxpayers in 2027 were forecast to pay $818 billion a year in interest costs
even before the tax cuts and spending increases, or 2.4 percent of G. D.P.
“If you look at conventional measures, unemployment looks really low,
but on the other hand if you look back to what we used to think of the potential of the economy a few years ago, we may have some room to grow.”
The public debt was already on track to rise relative to the size of the economy before the new tax
and spending deals; now it will probably rise faster.
ratio would rise to 91 percent in 2027, from 77 percent in 2017.
hasn’t updated those numbers to reflect the new tax and spending legislation, but the Committee for a Responsible Federal Budget estimates
that it will turn out to be between 99 and 109 percent, depending on whether provisions of the tax law are allowed to expire as they are scheduled to.
A budget deal passed in the early hours of Friday morning includes $300 billion in new spending over the next two years for all sorts of government programs
and $90 billion in disaster relief, without corresponding cuts elsewhere in the budget.
When the Congressional Budget Office last forecast the nation’s fiscal future in June, it
projected a $689 billion budget deficit in the fiscal year that begins this coming fall.
Taxpayers in 2027 were forecast to pay $818 billion a year in interest costs
even before the tax cuts and spending increases, or 2.4 percent of G. D.P.