Question

Does the 2017 tax cuts jobs act policy add to the long-term national debt within the U.S.?

Answer 1

By reducing corporate and individual taxes, the Tax Cuts and Jobs Act, combined with the sweeping deregulatory movements of the administration, will increase savings, investment and labor involvement, which the agency claims will increase annual GDP by nearly 1% over the next ten years.

However, in the coming years, the law will contribute substantially to the annual budget shortfalls. In the next ten years, tax cuts will add another approximately $1.85 trillion to the debt.

Even more worrisome is a scenario in which many of the provisions that are set to expire by 2025, such as tax cuts for individuals, are renewed, which would pile on even more debt.

Investors hold the bulk of U.S. debt, buying Treasury bonds at variable maturities and interest rates. This involves both national and foreign investors, as well as public and private funds.

More than 40 percent of the total is held by foreign investors, mostly by governments. By far, China and Japan are the two biggest Treasurys holders, each with more than $1 trillion. China has been America's biggest creditor for most of the past century. No other nation retains more than $341 billion apart from China and Japan.