Total U.S. Debt as % of GDP Projected to Surpass 100% By 2025 – Fiscal Policy Federal debt held by the public as a percentage of GDP is projected to exceed 100% in the next year or two. The Congressional Budget Office (CBO) projects that debt held by the public will rise above 100% of GDP by 2025. Debt held by the public was 97% of GDP at the end of fiscal year 2023, and is projected to exceed GDP by 100% or greater in 2025. The federal government issues debt on an ongoing basis for operating expenses and to meet obligations such as social security benefits and medicare payments. A rapidly growing expense has been interest payments on debt including Treasury bonds and notes. Slowing economic growth reduces tax revenue from individuals and corporations as income drops and tax receipts fall. The debt-to-GDP ratio is a key economic indicator that measures a country’s government debt in relation to its gross domestic product (GDP). The debt-to-GDP ratio is calculated by dividing a country’s total government debt by its gross domestic product. After peaking at over 100% in 1945 and 1946, the debt-to-GDP ratio gradually fell over the next three decades to only around 25% by 1975. The United States was able to reduce its post-WWII debt ratio from a historic high of over 100% in 1946 to a historic low of roughly 25% in 1975 by a combination of a balanced primary budget and economic growth that surpassed the interest rate on debt. Sources: CBO, U.S. Treasury, Federal Reserve

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Largest Hurricane Losses – Insurance Overview

As flood waters recede in the south and eastern seaboard states, Hurricane Helene is on track to be one of the costliest natural disasters in U.S. history. Not since Hurricane Harvey in 2017, and Katrina which ravaged Louisiana in 2005, have insurance companies been levied with billions of dollars in settlement claims.

Moody’s estimates a total of $20 billion to $34 billion in losses from the damage caused by Hurricane Helene. Other insurance industry estimates run higher, with the inclusion of uninsured businesses and individuals. The storm inflicted widespread damage across numerous states, destroying and crippling power facilities, agriculture, roads, bridges, water reclamation, schools, and business operations among various industries. Historically, rebuilding efforts following natural disasters such as hurricanes, has led to pockets of economic growth. The enormous cost of Katrina in 2005 led to hundreds of millions of dollars for rebuilding homes, roads, buildings, and re-establishing businesses. (Sources: NOAA, Dept. of Commerce, Moody’s)

Subscription Cancellations Are Now Easier Due To New FTC Rule – Regulations

In order to address the difficulty and annoyance of canceling unwanted subscriptions and memberships, the Federal Trade Commission (FTC) adopted new rules to protect consumers and facilitate the cancellation process. The FTC plans to impose fines and penalties to those vendors that don’t comply or fail to fulfill the required mandates.

The FTC’s “Click-to-Cancel” rule is aimed at making it easier for consumers to cancel unwanted subscriptions and memberships by requiring businesses to provide a cancellation process that is at least as easy as the sign-up process.

If consumers signed up online, they must be able to cancel online without having to interact with a representative. For phone sign-ups, a telephone cancellation option must be available during business hours at no additional cost.

The “Click-to-Cancel” rule takes full effect 180 days after publication in the Federal Register of the FTC, which is expected to be around April 14, 2025. (Source: Federal Trade Commission)

Why Consumer Confidence Is Falling – Consumer Behavior

Jobs and income weigh heavily on consumer confidence, as the ability to pay essential expenses have become more burdensome for millions of Americans. Consistent inflationary pressures continue to drain consumers while leaving less for discretionary expenditures, such as eating out and movies.

Consumer sentiment fell for the first time in three months as frustrations with lingering inflation and a weakening employment market pressured consumers to redirect their funds and cut certain expenses.

Some economists believe that the uncertainty surrounding the presidential election has also been a factor over the past few months, as future tax rates and economic growth remained elusive and not defined. (Sources: University of Michigan)

Where Taxes May Head & The Future of The Tax Cuts and Jobs Act – Tax Policy

What taxes may look like heading into 2025 will be a challenge for individual taxpayers. The Tax Cuts and Jobs Act (TCJA), which passed in 2017, made tax rate cuts for businesses permanent, but tax cuts for individuals are scheduled to expire at the end of 2025. With the newly elected administration, it is expected that the tax cuts and provisions will become permanent with Congressional approval.

The Tax Cuts and Jobs Act became effective on January 1, 2018, modifying tax rates for single and married tax payers. Certain deductions were either capped or eliminated, including the deduction for state and local income tax, sales tax, and property taxes, known as the ”SALT deduction” which was capped at $10,000 per tax year. The standard deduction nearly doubled, from $12,700 to $24,000 for married couples, and from $6,350 to $12,000 for individual filers. (Sources: IRS, Tax Foundation)