In 1946, the United States was recovering from World War II. Many products that fueled the American economy, redirected toward the war effort, had yet to recover in a post-war world. And the war had been expensive.
It’s understandable then, that 1946 produced a record 106 percent federal debt to gross domestic product (GDP) ratio. That record has stood, as have those of the years immediately after WWII, for over 50 years.
In 2018, we’re not involved in a world war. We aren’t recovering from a world war that redirected vast amounts of American industry and workers toward production of materials for a war effort.
But in 2018, we’re on track to beat those post WWII debt records.
That projection comes from the Congressional Budget Office (CBO).
The national debt is on track to nearly double as a share of the economy over the next 30 years, according to a new report from the nonpartisan Congressional Budget Office. https://t.co/9zcswj5CY9
— NBC News (@NBCNews) June 26, 2018
ICYMI: America’s debt is headed for the highest levels since World War II.
Current debt-to-GDP level = 78% (highest since 1950)
CBO projection for 2028 = 96%
By 2034, America’s debt-to-GDP could surpass the peak of 106% recorded in 1946https://t.co/u2n41Dp7AC by @JStein_WaPo pic.twitter.com/E4qn7Jil8C
— Heather Long (@byHeatherLong) June 27, 2018
The CBO, a nonpartisan resource for budget and economic information, reports by the end of 2018, the USA’s debt to GDP, a measurement of the US economy, will reach 78 percent. The last time our debt reached that level was 1950 during the recovery from WWII.
And by 2028? America is headed for 96 percent debt to GDP with a trajectory to exceed that 1946 high of 106 percent.
But why, when we’re not in a war recovery cycle, would our debts soar so high, eventually eclipsing our economic growth?
Remember the Republican tax plan that President Donald Trump and GOP leaders Paul Ryan and Mitch McConnell pushed? Recall the GOP tax plan, giving tax cuts to corporations and the highest income brackets, that would pay for itself and bring industry back to the United States and create jobs?
Turns out, it was not as advertised according to the many financial analyses done before and after Trump’s tax cuts took affect. Turns out the dire warnings about what those tax cuts for the wealthiest and most profitable would do, they actually are doing.
I thought the tax cuts were going to pay for themselves. https://t.co/46nCc6LpwZ
— Tom Colicchio (@tomcolicchio) June 27, 2018