Director’s Blog » Blog Archive » The Long-Term Budget Outlook

Tickler — Fri, 17 Jul 2009 00:16:25 +0000

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy. The following chart shows our projection of federal debt relative to GDP under the two scenarios we modeled.

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CBO: The Long-Term Budget Outlook

Ticklers Wife — Thu, 16 Jul 2009 23:04:14 +0000

Measured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs—Medicare, Medicaid, and Social Security.

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Director’s Blog » Blog Archive » The Long-Term Budget Outlook

CBO: The Long-Term Budget Outlook