US debt to hit 144% of GDP in 30yrs & keep growing with no end in sight – CBO
US federal debt is projected to soar in the next 30 years, reaching 144 percent of GDP by 2049, according to a report from the Congressional Budget Office (CBO) released on Tuesday.
The nonpartisan CBO expects federal debt to increase from a projected 78 percent of GDP by the end of 2019 (the highest since just after WWII), to 92 percent by 2029 and 144 percent by 2049.
“That level of debt would be the highest in the nation’s history by far, and it would be on track to increase more,” according to the CBO.
The US national debt has already climbed above $22 trillion. It is projected to continue rising by a trillion each year over the next decade, due to the cost of pensions and medical care for the retiring Baby Boomers.
On Tuesday, CBO Director Phillip Swagel said: “The prospect of such large deficits over many years, and the high and rising debt that would result, poses substantial risks for the nation and presents policymakers with significant challenges.”
To put the numbers in perspective, in the year before the 2008 financial crisis, US federal debt was at 35 percent of GDP, less than half of what it is now.
Peter G. Peterson Foundation CEO Michael Peterson said: “It’s bad enough that our annual deficit will soon reach $1 trillion, but CBO’s long-term projections show that the deficit will continue growing into the future, with no end in sight.”
“These clear projections should motivate our lawmakers to begin managing the debt immediately, and budgeting responsibly to help America meet its most pressing challenges.”
Following stimulus measures by the Trump administration, such as a $1.5 trillion tax cut, deficits have been on the rise.
The Congressional Budget Office projections are based on certain assumptions, including that no changes will be made to existing laws and that programs such as social security will be fully paid for. The agency warned that even bigger increases in the national debt are possible, though the projected increases in debt and deficits are actually lower than last year’s projections.
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