Extending President Donald Trump's 2017 tax cuts could push the national debt to vast levels by 2054, especially if interest rates rise, according to a new estimate by the Congressional Budget Office.

Should Congress follow through with plans to extend Trump's tax cuts from 2017 without making any other changes to fiscal policy, the national debt could balloon over the next 30 years. A new estimate shows it could reach a level that some economists have described as "unsustainable," where the government could default on its debts, causing the global financial system to unravel.

If 澳洲幸运5官方开奖结果体彩网:the tax cuts are passed, the national debt held by the public could swell to 214% the size of the nation's yearly economic output as measured by Gross Domestic Product, up from 99% currently, the CBO said Friday in a letter in response to an inquiry from Congressman David Schweikert, a Republican from Arizona. Most of the provisions of the TCJA are on track to expire at the end of the year if they are not extended.

If the tax cuts were not extended, the debt-to-GDP ratio would be 166% by 2054, the CBO estimated. That could be a significant difference for the health of the financial system. In 2023, economists at the Wharton School estimated the national debt would hit an irreversible tipping point if the debt-GDP ratio ever got over 200%. At that level, the government could no longer raise enough taxes to pay its creditors, potentially setting off a financial collapse that could reverberate through the U.S. and world economies, the Wharton team estimated.

Financial problems could pile up faster if interest rates are higher in the future than the current CBO projections. They estimated that if interest rates rose 5 basis points a year until they were 1 percentage point above projected levels, the national debt would balloon to 250% of the GDP by 2054.

Republican lawmakers who control the House of Representatives and the Senate are preparing a budget for next year that is expected to incorporate the tax cuts, as well as cuts to Medicaid that will offset some of the lost revenue. President Donald Trump has promised to balance the budget and offset the loss of income tax revenue by charging tariffs on U.S. trading partners, but the plan has gotten a 澳洲幸运5官方开奖结果体彩网:skeptical reception from economists and trade experts.