Tag Archives: US budget deficit

Ahead of the mid-term elections, politicians in Washington are trashing out proposals that aim to make permanent the tax cuts voted last December.The House Republicans have launched a new plan to cut taxes, mostly revolving around the idea of making recent cuts for households permanent (they are currently scheduled to lapse in 2025).This willingness by Congress to continue the tax-cutting effort, even if uncertain, could reassure a US business community that has been receiving mixed signals...

While optimistic about this year, the CBO does not believe the pace of growth is sustainable and sees a substantial increase in the fiscal deficit. The Congressional Budget Office (CBO), a bipartisan budget body reporting to US lawmakers, released a fresh 10-year economic and budget outlook earlier this week, incorporating the effects of both the December tax cuts and the March Congressional spending deal.The news is not great. The CBO seems half convinced about the medium-term benefits of...

Nudged by the White House, Congress is in fiscal easing mode in the belief that the US economy needs further stimulus. Meanwhile, some medium-term debt issues remain unaddressed.Washington DC is in fiscal easing mode. Having voted for bold tax cuts in December, Congress is now increasing the theoretical spending limits for this year and next, by USD 300bn. This comes even though budget data for the past two years have been disappointing notwithstanding a solid labour market.From a growth...

The rise in the US deficit may sap support for Trump’s ambitious plans to cut taxes.US fiscal year 2017, which ended on September 30, did not end on a high note. The deficit rose to 3.5% of GDP, edging up 0.3 percentage point from fiscal year 2016. This deterioration stands in stark contrast to the overall improvement in the US economy. GDP growth remains above potential, and unemployment has been on a downward trend throughout the year.What is particularly puzzling, if not worrying, is the...

The Trump administration is noticeably more focused on trade issues than on the ongoing deterioration in public finances.Second-quarter current account data from the US Bureau of Economic Analysis showed once again a sizeable trade deficit, particularly in merchandise trade excluding energy. The energy boom driven by shale gas and light oil has reduced the US’s dependency on energy imports, in turn improving the headline current-account reading. But the US is still a net petroleum importer...