In a recent report, the Congressional Budget Office has projected heavy debt equal to 181% of GDP for America by 2053. The AP’s Fatima Hussein reports:
The Congressional Budget Office is giving the world a concerning look at the U.S. government’s ledgers: ever higher deficits, greater government spending and tax revenues that only begin to increase when existing tax cuts expire.
The nonpartisan agency estimates in its latest 30-year outlook, released Wednesday, that publicly held debt will be equal to a record 181% of American economic activity by 2053. That compares with a projected 98% at the end of this budget year, a sign the government is getting more dependent on debt to pay for Social Security, Medicare, the military, infrastructure and an array of programs that benefit millions of households.
The higher debt load is not all that shocking given the deficit spending of the past two decades. But the CBO figures do offer a bit of comfort in that annual deficits after 2042 are lower than forecasted in the agency’s report from last year. This is because the primary borrowing and interest rate costs are lower than what the CBO model year showed then, meaning this fiscal crystal ball can improve as the numbers are refined.
Yet there is a clear warning that lawmakers will be constrained as spending increases after 2026, driven largely by increased healthcare and Social Security costs tied to an aging population and a projected lower labor force participation rate of 60.3% in 2053, from 62.2% now.
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