US debt may explode above 200% GDP in two decades when Trump’s tax decline becomes constant, says CBO – putting it on an unstable level

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March 22, 2025

A non -partisan budget on the Congress budget Calculated what impact would be when the law on reducing taxes and jobs becomes constant. It turned out that the US debt persists in the US may increase above 200% of GDP by 2047 and 250% by 2054, believing that a greater debt load also exerts greater pressure on borrowing costs.

Make a decrease in President Donald Trump’s taxes to send our debt to us, which is stored above 200% of GDP for several decades, according to a new estimate of the budget budget in Congress.

The achievement of Trump’s economic policy should end from the first term at the end of this year, but he and the Senate Republicans have urged to make it constant.

Some fiscal conservatives pushed back, however, forcing Republican legislator to ask for a CBO about the assessment of what it would do with government debt.

In response, CBO said on Friday What, if the law on reducing taxes and jobs was expanded constantly, and there were no other changes in fiscal policy, the debt stored by the public will reach 214% of GDP in 2054.

And assuming borrowing costs are facing greater pressure against the background of deterioration of the fiscal situation, which is an additional 1 percentage score, the debt will reach 204% of GDP in 2047 and exceed 250% in 2054.

Total debt in the US is 36 trillion. Dollars, and the debt stored by the public is about $ 29 trillion. Costs for US debt payments Already heads 1 trillion a year, Even more than the Pentagon budget, adding even more debt.

“Macroeconomic feedback effects will further increase interest rates, and therefore will lead to even worse financial results,” ” Warned Peter G. Peterson’s Foundation. “Such conclusions demonstrate the sensitivity of the country’s finance to borrowing.”

According to CBO’s current basic assessment, which suggests that tax reducing – an unlikely scenario – the debt will increase to 166% by 2054 from 99% today. Even this forecast would have broken the records, leading the previous maximum during the direct consequences of the Second World War, and the debt will also grow.

Told the White House official Wealth The fact that the reforms of the Trump administration, such as more energy production, de -deregulation and costs, will push growth and expand the tax base. It will also reduce inflation, which allows the federal reserve system to reduce interest rates and facilitate borrowing costs.

The official added that the administration plans to attract profit from the tariffs, noting that Trump’s duties in China have raised hundreds of billion dollars from the first term without much impact on inflation and growth.

The CBO report does not estimate how sustainable the debt will be. But if it exceeds 200% of GDP, it violates the maximum level laid out Pan Wartan’s budget model.

In a report in October 2023, entitled “When federal debt reaches impossible levels?” It states that the US debt persists by the public cannot exceed 200% of GDP, even under favorable market conditions.

While in Japan even more debt burden, this is not an appropriate example, since its higher speed savings allows the country to absorb more public debt.

“This 200 percent value is calculated as an external related to the use of different favorable assumptions: more plausible value closer to 175 percent, and even then it suggests that the financial markets believe that the government eventually implements an effective closure rule,” the statement reads. “Once the financial markets are considered otherwise, financial markets can unravel with smaller debt and GDP ratios.”

According to CBO estimates, the debt warnings are collected. Most recently, Millionaire Dalio’s investor predicted that the US is being sent to A cluttered loan crisis.

After all, the debt supplies that the US should sell will be greater than the demand for world financial markets that will lead to “shocking events” – he warned in Get off live Conference in Singapore earlier this month.

“There may be debt restructuring. Can put pressure on countries to buy debt, possess debt, political pressure on countries,” Dalio said. “It can reduce payments to some countries for political reasons, there may be monetization of debt.”

Originally this story was presented on Fortune.com