Republican tax cuts to fuel historic United States deficits: CBO

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The independent financial scorekeeper said that the long-term USA debt, now more than US$ 21 trillion, could soar to more than US$ 33 trillion by 2028, with increasing annual deficits jumping from US$ 804 billion this year to US$ 1.5 trillion in a decade.

Real GDP will grow by 3.3 percent in 2018; 2.4 percent in 2019; and 1.8 percent in 2020, it said. Beginning in 2020, however, the CBO said deficits would exceed $1 trillion a year.

Despite stronger-than-predicted economic growth ahead, the CBO said the deficit will grow to $804 billion in fiscal 2018, which ends on September 30, up from $665 billion in fiscal 2017.

"The only time since World War II when the average deficit has been so large over so many years was after the 2007-2009 recession", the budget office noted. But it's worth remembering Republicans insisted they didn't need to find offsets for their tax package past year because the cuts would pay for themselves through new economic growth.

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The CBO's forecast shows the fiscal stimulus will lift growth rate in short term, but do little to boost economic prospect in longer term. In our projections, budget deficits continue increasing after 2018.

Republicans controlling Washington have largely lost interest in taking on the deficit.

The deficits are expected to drive the national debt from $21 trillion now up to $33 trillion within 10 years. "From day one, the Republican agenda has always been to balloon the deficit in order to dole out massive tax breaks to the largest corporations and wealthiest Americans, and then use the deficit as an excuse to cut Social Security and Medicare". The CBO also estimated that certain health insurance premiums in the individual marketplace are projected to increase by 34% on average this year due to changes in the tax law.

The economic growth promises to drop the nationwide unemployment rate below 4 percent, CBO predicts. But in an indicator that Republicans are becoming concerned about the political liability of surging shortages, " the House will vote Thursday to a constitutional amendment to require balanced funding.

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In fact America could be staring at a decade where the size of its debt and budget deficit starts growing faster than the economy, and if the economy slows, then the situation will worsen dramatically.

If the Republicans really wanted to lock in their tax cuts, they needed spending restraint.

Still, some economists are skeptical of the peril posed by deficits, noting that during the Obama administration many deficit hawks warned of a fiscal crisis that has so far failed to materialize.

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