The federal government’s most urgent domestic challenge is the exploding debt and deficit. America’s debt nearly doubled during the Obama years, reaching 76% of gross domestic product in 2017. If nothing is done it will surpass 100% of GDP within a decade. The U.S. will then have one of the highest debt ratios in the industrial world—topped only by countries like Greece, Italy and Japan.
Most of the projected debt increase over the next 10 years is a result of the recent cuts to the personal income tax, including the lower rates, the big increase in the child credit, and the doubling of the standard deduction. The personal tax cuts were included in the legislation to get the congressional votes necessary to enact corporate tax reform, which was economically more important.
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