There’s a new government report on the national debt and deficit that reiterates the country is screwed if Congress and the president cannot be fiscally responsible.
According to the latest estimate from the Congressional Budget Office, the U.S. will add another $12 trillion in public debt over the next decade as economic growth slows and government spending increases. Over the past 50 years, federal deficits have averaged 2.9 percent of Gross Domestic Product (GDP), but no more. The CBO projects that in the next ten years, federal budget deficits will average 4.4 percent of GDP, totaling $11.6 trillion.
Taxes are also projected to increase once certain income tax provisions in the 2017 tax reform bill expire at the end of 2025, but the projected increase in revenues will not make up the deficit. Social Security, Medicare, and other mandatory spending continue to be the largest drivers of the debt. As the population ages, the government will need to spend more money on programs for the elderly. Discretionary spending is expected to fall because of budget caps Congress has passed — but Congress usually lifts those budget caps whenever spending is near its limit, so that projection likely underestimates how much government will spend. With all the additional spending and debt accumulation, interest payments on the debt are expected to rise sharply.
This is the real danger: As interest payments go up, they consume a larger portion of the budget, leaving less room for Congress to spend money on popular programs or the military. Congress will be forced to raise taxes or borrow more money to pay the interest on the debt and avoid government default, which will in turn increase debt and make the interest payments even bigger. Then the cycle repeats itself ad nauseam until collapse.
Meanwhile, the CBO forecasts slower economic growth, averaging only 1.7 percent of GDP in the next decade. The cause is slower population growth and anticipated higher interest rates from the Federal Reserve.
All told, the slowing economy and rampant government spending mean that by 2029, the size of the debt, relative to the size of the economy, will grow to 93 percent. If that trend holds, shortly after that, the country’s national debt will be bigger than the entire U.S. economy.
Does anybody care? Numbers and statistics are boring. They don’t go viral. Celebrities don’t talk about them, and numbers as big as a trillion are impossible to wrap our minds around. But we need to care. If Congress does not control spending and these projections become reality, the country as we know it will end, and we’ll all be impoverished.
Chris Pandolfo is a staff writer and type-shouter for Conservative Review. He holds a B.A. in politics and economics from Hillsdale College. His interests are conservative political philosophy, the American founding, and progressive rock. Follow him on Twitter for doom-saying and great album recommendations @ChrisCPandolfo.
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