Debt climbs to new highs as budget outlook worsens
The first year of the current administration has seen bold moves to overhaul the economy.
- Tax cuts hit record lows
- Tariffs surged
- Federal spending was trimmed sharply
Yet these shifts largely cancel each other out when it comes to the national budget.
Forecast: Borrowing Surges
A recent forecast from a non‑partisan agency shows that borrowing will rise even more than expected.
- Projected shortfall over nine years:
- From $21.8 trillion to $23.1 trillion
- A gap of $1.4 trillion
The agency warns that the debt owed to the public could outpace the country’s yearly economic output.
- By 2036: debt might reach 120 % of GDP, surpassing the peak seen after World War II.
Such a level could threaten stability in the world’s largest economy.
Budget Impact Breakdown
| Item | Effect |
|---|---|
| Sweeping tax cuts (favoring high earners) | Cost ≈ $4.7 trillion over nine years |
| New tariffs | Revenue ≈ $3.0 trillion over nine years |
Despite the revenue gained from tariffs, it is unlikely to offset the overall debt growth. The combination of deep cuts and new taxes means that, despite short‑term policy changes, the long‑term fiscal picture remains concerning.
Economists’ Warning
“Without a clear plan to reduce borrowing, the nation risks facing a debt crisis.”
