Tax Cut Deal Fires Up Federal Deficit

Category: Money

Tax Cut Deal Fires Up Federal Deficit

Written on January 27, 2011 by Japhet Writ

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The federal deficit for 2011 will hit $1.5 trillion, driven higher by the "slow and tentative" economic recovery and the bipartisan tax cut deal passed late last year, the Congressional Budget Office said Wednesday.

According to the Congressional Budget Office, the federal deficit will hit $1.5 trillion this year. The reason? The “slow and tentative” economic recovery, and the tax cut deal that was approved late last year. That said, the federal forecast would equal to almost 10% of the economy. But more than that, the national debt may rise to $12 trillion over the decade if lawmakers continue to extend may of today’s policies that is set to expire soon.

Simply put, USA’s gathered national debt over the years would hit 97% of GDP by 2021. Devastating as it sounds, but that would be the highest level of federal deficit in the post-WWII era.