A new report released last Friday shows that the federal budget deficit could balloon to nearly $2 trillion in ten years, even as the national debt is expected to be bigger than the entire U.S. economy within the decade.
The Committee for a Responsible Federal Budget (CRFB) has drawn up a report, using Congressional Budget Office (CBO) methodology, to make new budget projections that account for the recent tax cuts and irresponsible spending legislation.
“Our projections show that under current law, trillion-dollar deficits will return permanently by next year and debt will exceed the size of the economy within a decade. Under potentially more realistic policy assumptions, the country will be facing a $2.4 trillion deficit and debt of 113 percent of Gross Domestic Product (GDP) by 2028,” the report summary states. “These projections show a fiscal situation that is clearly unsustainable.” These numbers assume that the tax cuts will expire on schedule.
Tracking the bills that Congress has passed since June 2017, when the CBO released its last budget projections, the CRFB estimates that the legislation Congress has passed in just half of President Trump’s first year in office will add $2.4 trillion to the debt by 2028. These bills include the tax cuts, the bipartisan agreement to bust the budget caps, disaster relief, and rising interest payments on the debt.
The debt, which is currently about three-fourths as large as the entire U.S. economy, will be larger than the value of everything produced in the United States by the year 2028.
“Debt and deficits would be much worse if temporary spending increases and tax cuts are made permanent,” the CRFB writes.
Acknowledging that these specific projections are “uncertain,” the CRFB nevertheless stresses that “the country faces an unsustainable fiscal situation that has significantly deteriorated in the last year.”
“Importantly, these projections also do not supplant the need for CBO’s thorough budget outlook scheduled to be released in April. CBO does a much more rigorous analysis than we are able to with access to crucial data and sophisticated modeling. We merely seek to inform the conversation until CBO has a chance to release its full report.”
The consequences of unsustainable debt ought to be the topic of conversation in every American family. As the debt grows, the interest payments on the debt become a bigger and bigger part of the budget. This means less money can be allocated to Social Security, Medicare, Medicaid, and other entitlement programs as our aging population comes to depend on them. Taxes will have to go back up to avoid collapse. The economy will be increasingly burdened by the government. Increased government spending will crowd out private investment.
As the economy shrinks, government revenues shrink, and the country will enter into a death spiral of debt that ends with where Greece is now.
Long story short: If President Trump and Congress do not cut spending, we’re all screwed.
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.
Send tips and hate mail to [email protected]