The news today is all about this question:
Will the Tax Cuts and Jobs Act reduce deficits and what will happen to the U.S. debt?
The video cites the Congressional Budget Office (CBO).
Discuss these questions in your post:
- Visit the CBO website and confirm that the reporting is accurate. Was the reporting accurate? Why or why not?
- Do you think the Tax Cuts and Jobs Act will reduce our deficits? Explain your answer.
Discuss with your peers:
- Reply to a peer’s response. Did they share the same reasoning about the Tax Cuts and Jobs Act as you did?
Respond to classmate:
Watching the video, and reviewing the information on the Congressional Budget Office site, I am seeing that the expected GDP will take growth over the next few years. What does this actually mean? This means that the country and its produced goods are growing, the tax act put into place by the current administration has a great affect on how a company in the country invests back into their business. With the growth of GDP, shows growth in the economy. With the growth of the economy, sooner or later the Fed will raise interest rates, which is good and bad. The good is for investors, their portfolios will look much nicer. The bad of higher interest rates will make the cost of some consumer consumption on things such as loans, and mortgages higher, which may or may not effect the economy in an adverse way.
If US Companies are using the tax cuts properly, then they should be investing in the employees well being and future. This will and should offset the cost of interest rates that will deter people from buying homes and cars.
As far as taxes are concerned, less taxes collected, means that the government needs to tighten up on spending, which is where the problem really lies. As long as Congress is status quo on spending, the tax cuts will do no good for the economy as the federal debt will keep rising and rising. Which in turn will deter consumer confidence in the market, which may cause a trickle effect on how the market reacts to the amount of deficit showing each year. Our government needs to learn how to manage money, as we in our own households have to manage money…YOU DONT SPEND WHAT YOU DONT HAVE!!!!