Debt Projections Pre- and Publish- Tax Cuts and Jobs Act (of 2017)

CBO projections of debt, normalized by GDP and potential GDP, from earlier than December passage/signing (CBO June 2017) and after (April 2018).

Determine 1: Federal debt held by public CBO projection as of Jun 2017 (blue squares), and as of April 2018 (pink squares), divided by nominal GDP. Sources: CBO, Finances and Financial Outlook, June 2017, April 2018, BEA, and writer’s calculations.

Right here is debt, normalized by CBO estimated potential GDP.

Determine 2: Federal debt held by public CBO projection as of Jun 2017 (blue squares), and as of April 2018 (pink squares), divided by nominal potential GDP. Sources: CBO, Finances and Financial Outlook, June 2017, April 2018, July 2023 (for potential GDP), and writer’s calculations.

Whereas one can not impute your complete change within the debt-to-GDP ratios to the TCJA, we do know that utilizing non-fanciful estimates, TCJA was going to blow a gap in authorities funds (see e.g. right here). What have been the deficit hawks of at present saying again then (at a time when the output hole was arguably fairly small)? (Except for CRFB, who have been in opposition to TCJA.)