Donald Trump news: US will spend more on debt than the military by 2023, report reveals | World | News


The worrying figures were released by the Congressional Budget Office which tracks spending by the US government. Last year the US spent $263billion (£203billion) paying off the interest on its debt, accounting for 1.4 percent of national GDP. However, this figure is projected to increase dramatically to a high of $915billion (£707billion) by 2028, representing 3.1 percent of US economic output.

According to these figures, by 2020 the US will spend more on debt interest payments than on its Medicaid health programme, and by 2023 it will be spending more than on the military.

Federal debt as a share of US economic output, or GDP, is currently at its highest since World War 2, standing at 78 percent.

The US Treasury Department expects to issue $1.34trillion (£1.04trillion) in debt by the end of this year, the highest figure since 2010.

The Trump administration boosted US government spending by $300billion (£232billion) earlier this year with increased spending on the military and infrastructure.

Simultaneously, government revenue is falling significantly as a result of the $1.5trillion (£1.16trillion) worth of tax cuts agreed by President Trump late last year.Maya MacGuineas, committee president of the Responsible Federal Budget watchdog, argued this will restrict economic decision-making.

She argued: “The fact that interest is the fastest growing part of the budget and is on track to eclipse other important parts of the budget, for instance spending on children, is going to cause more hesitation just to change every singe item.”

According to Treasury Department figures, the US government deficit, the difference between spending and income, rose to $779billion (£682billion) in 2018.

The Committee for a Responsible Federal Budget says this figure could reach $1trillion (£875billion) as soon as next year.

That is the highest figure since 2012 when the US was still recovering from the 2008-9 financial crisis.

As a result of Republican cuts, the amount of corporation tax collected this year fell by around $76billion (£66billion).

Last month White House budget director Mick Mulvaney commented: “The President is very much aware of the realities presented by our national debt.

“America’s booming economy will create increased government revenues, an important step towards long-term fiscal sustainability.

“But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”

Source link


Please enter your comment!
Please enter your name here