Many posts have discussed federal deficits and the federal debt.
CBO responds to a request from Senator Merkley for information about how federal deficits and debt held by the public would be affected by Public Law 119-21, an act to provide for reconciliation pursuant to title II of H. Con. Res. 14, and then additionally by making permanent 10 tax provisions that are temporary in that law.
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that over the 2025–2034 period deficits will increase by $3.4 trillion for the legislation as enacted, excluding any macroeconomic or debt‑service effects.
CBO estimates that the additional debt-service costs under the legislation as enacted will total $718 billion over the 10-year period. That change will increase the cumulative effect on the deficit to $4.1 trillion. As a result, and net of any changes in borrowing for federal credit programs, the agency estimates that the legislation will increase debt held by the public at the end of 2034 by 9.5 percentage points relative to CBO's January 2025 baseline budgetary projections of gross domestic product (GDP). Other factors, such as administrative actions affecting tariffs and immigration, also have affected deficits and debt since January 2025 and will be reflected in CBO's next baseline.
Desmond Lachman at The National Interest:
A fundamental weakness of the US economy is that it relies on the kindness of strangers to finance its twin budget and trade deficits. Indeed, of the $29 trillion in outstanding U.S. Treasury bonds, foreigners own over $8 trillion. This makes it of paramount importance that the United States maintains investor confidence that it will not try to inflate or tax its way out from under its debt mountain. If it fails to maintain that confidence, the country could face a crisis in the bond or dollar markets