‘U.S. Has Multi-Trillion Deficits Over Next Decade’

WASHINGON (Fox News) –U.S. Congressional Budget Office has reported that any improvement to Medicare’s fiscal situation is the result of higher payroll taxes following passage of TCJA.
In fact, the latest CBO report incorporated the huge surge in tax revenue, accounting for $800 billion or nearly half of the $1.8 trillion dollar improvement in the FY ‘22 budget deficit. The rest of it comes from expiring COVID emergency spending.
You can bet that those Trump tax cuts contributed a big chunk to that revenue pick-up, and what limited overall prosperity we have today.
The CBO, by the way, also tip their hat to two other supply-side criticisms of Bidenomics. One is that all the government checks from the March 2021 so-called emergency spending plan boosted demand and contributed to the high rates of inflation. Plus, those very same government checks, according to the CBO, “might also have slowed the recovery of labor force participation in 2021.”
In other words, as the Democrats ended workfare and paid people not to work with massive assistance payments of all kinds, it postponed job recovery and increased inflation. In other words, big government socialism didn’t work. Delighted to have the CBO on board.
That makes almost no one left who approves of Biden’s radical progressive woke economics, but that’s about as much cheering of the CBO report that I can muster because based on current law, we still have multi-trillion deficits as far as the eye can see over the next 10 years.
By 2027, the deficit is back to $1.4 trillion. By 2032, it’s $2.2 trillion. In total, deficits will increase by $15.7 trillion.
As usual, the villain in the deficit story is federal overspending. Even though the COVID emergency programs expire, the government is set to spend 23.2% of GDP over the next decade. That’s well above the 20.8% average during the prior 50 years.
Revenue is expected to average 18.1% of the economy—also higher than the 50-year average. As a result of all this, federal debt held by the public is projected to rise to 109.6% of GDP or $40.2 trillion.
Gross federal debt, which included internal government transfers, sums to $45.3 trillion. Those are big numbers. Those are bad numbers and most disappointing is with all this spending the CBO, like most of the economics profession, still doesn’t believe the U.S. economy can grow.