{"id":205591,"date":"2024-02-11T07:09:22","date_gmt":"2024-02-11T07:09:22","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/02\/11\/debt-projections-pre-and-post-tax-cuts-and-jobs-act-of-2017\/"},"modified":"2025-06-25T17:21:55","modified_gmt":"2025-06-25T17:21:55","slug":"debt-projections-pre-and-post-tax-cuts-and-jobs-act-of-2017","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/02\/11\/debt-projections-pre-and-post-tax-cuts-and-jobs-act-of-2017\/","title":{"rendered":"Debt Projections Pre- and Post- Tax Cuts and Jobs Act (of 2017)"},"content":{"rendered":"

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CBO projections of debt, normalized by GDP and potential GDP, from before December passage\/signing (CBO June 2017) and after (April 2018).<\/p>\n

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Figure 1:<\/strong> Federal debt held by public CBO projection as of Jun 2017 (blue squares), and as of April 2018 (red squares), divided by nominal GDP. Sources: CBO, Budget and Economic Outlook, June 2017, April 2018, BEA, and author\u2019s calculations.<\/em><\/p>\n

Here is debt, normalized by CBO estimated potential GDP.<\/p>\n

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Figure 2:<\/strong> Federal debt held by public CBO projection as of Jun 2017 (blue squares), and as of April 2018 (red squares), divided by nominal potential GDP. Sources: CBO, Budget and Economic Outlook, June 2017, April 2018, July 2023 (for potential GDP), and author\u2019s calculations.<\/em><\/p>\n

While one cannot impute the entire change in the debt-to-GDP ratios to the TCJA, we do know that using non-fanciful estimates, TCJA was going to blow a hole in government finances (see e.g. here<\/a>). What were the deficit hawks of today saying back then (at a time when the output gap was arguably pretty small)? (Aside from CRFB, who were against TCJA.)<\/p>\n

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