The Tax Cut Bill Would Push U.S. Debt Over the Critical Breaking Point
5 Pages Posted: 20 Nov 2017 Last revised: 6 Dec 2017
Date Written: November 20, 2017
Best data shows that federal debt is close to the critical breaking point at which creditors cease extending faith and credit to the U.S. government. Internationally, government debt of 80% of GDP has led to fiscal instability. If the Tax Cut Act of 2017 passes, debt will be above the 80-percent-of-GDP line in 2018, up to 91 percent of GDP by 2022, and to 117% of GDP by the end of the decade.
At its core, the bill gives $2.6 trillion over a decade as incentives to capital. There is a global glut of capital. Capital is in oversupply. The return to risk-free capital is zero. It will be driven below zero by the tax shelters created by the bill and by capital diverted from our trading partners. Incentives to an oversupplied commodity will not increase growth.
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