Over the short term, the debt issue likely will be superseded by other news, particularly the strong burst of growth and the tariff battles the U.S. has launched against its trading partners around the world. Ironically, the Trump administration has promised that breakout economic performance will help take care of the rising debt load brought on by tax cuts and higher spending, but the early results don’t seem to bear those hopes out.
“Booming economic growth has not been sufficient to lower the budget deficit — in fact, the deficit and Treasury borrowing are headed sharply higher, and virtually no one in Washington seems to care,” Greg Valliere, chief global strategist at Horizon Investments, said in his daily note Thursday.
Indeed, the Congressional Budget Office projects the deficit to be just a shade under $1 trillion in 2019 and then pass that level in 2020 and eclipse $1.5 trillion by 2028. The costs to finance all that debt has continued to grow, hitting $458 billion in fiscal year 2017 and already at $415 billion in 2018 with three months left in the fiscal year.
Revenue receipts, meanwhile, are lagging.
Tax and withholding payments from individuals and corporations have come in at $1.752 trillion in calendar year 2018, about $17 billion below the same point in 2017, a difference of about 1 percent, according to DataTrek Research. That’s also below the 0.2 percent gain in revenue the government had projected.