U.S. Government Deficit Grew 17 Percent After Trump’s Tax Cuts

The U.S. government ended the 2018 fiscal year with flat revenue and its largest budget deficit in six years, a development that appears to stem partly from President Trump’s tax cuts, The Wall Street Journal reports. According to the U.S. Treasury Department, the budget deficit amounted to $779 billion in the fiscal year that ended Sept. 30, a 17 percent increase from the $666 billion deficit recorded in 2017. While budget deficits generally shrink during periods of low unemployment, the opposite appeared to happen in the 2018 fiscal year, with Republican tax cuts holding back tax revenue. “A deficit of this magnitude in an economy this strong is historically unprecedented,” Jason Furman, an economic policy professor at Harvard University, told the Journal. Furman, who served as chairman of the Council of Economic Advisers in the Democratic administration of President Obama, blamed the stagnant revenue on Trump’s tax reforms, saying “fiscal stimulus at this stage of the economic expansion is contrary to all sound tenets of economic policy.”