Despite promises of Donald Trump to improve the US economy to the whole new level, it is the country’s public debt that hits new levels. Pundits say that by the end of this year, the country’s debt will make up 78 percent of the GDP. Last time a similar situation was seen back in 1950.
Given Trump’s ambitions and long-term plans, experts at the Congressional Budget Office say that 78 percent is just a beginning. Forecasts suppose that if neither Trump nor some next US President changes the current strategy, the debt will amount to 96 percent of the country’s GDP by 2028. Some may be terrified by these numbers, but even the United States has seen worse. For example, the historical record was established in 1964 when the debt totaled 106 percent of GDP due to high expenses caused by the Second World War. In other cases, an increased debt was linked to severe economic slumps that the US suffered during different time periods. The current surge in the public debt is hard to explain. Perhaps, it is the first time when the debt is rising amid healthy economic conditions. There is a structural discrepancy between the collected taxes and the country’s spending, which means the reason is not a global crisis or local economic decline, but irrational use of available resources.
Besides, Donald Trump’s tax reform significantly decreased budget revenues. In its research, the Congressional Budget Office supposed that the income tax cut would be cancelled by the end of the year. However, the Republicans reiterated several times that the taxes would remain trimmed and promised that the future Congress would take measures to extend the corresponding law.
