Posted on 07/21/2016 5:51:20 AM PDT by Kaslin
The Congressional Budget Office recently released its long-term budget outlook. There isn't much new there; we are still in the red, and it will only continue to get worse. Considering the extent of the problem, you would think someone on the campaign trail would pay attention. Yet no presidential candidate really is.
First, CBO projects that the federal public debt-to-GDP ratio will go from its current 75 percent (up from 39 percent in 2008) to 86 percent in 2026 and 141 percent in 2046. On the deficit side, CBO projects that by 2020, our deficit level will reach $1 trillion, up from its current level of $534 billion. Today's deficit-to-GDP ratio is 2.9 percent, and it may be close to 5 percent in 10 years and 8.8 percent in 2046.
There are a lot of assumptions going into these projections. As we know, a small change in these assumptions can have a significant impact. For instance, the newest projections show a slight improvement over previous projections because of lower-than-expected interest rates. However, CBO warns, a 1 percent increase in interest rates would propel the debt-to-GDP level to 188 percent. Gross debt would be much higher.
In addition, we know that many of these assumptions (e.g., that there will not be a depression in the next 30 years and that the unemployment rate will stay consistently at 5 percent over the next 30 years) are unlikely to materialize, which would make the final numbers look way worse than they do now.
But even without assuming the worst, CBO talks about our dire fiscal outlook, "with debt growing larger in relation to the economy than ever recorded in U.S. history." Indeed, down the road, debt is projected to reach much higher levels than in the aftermath of World War II, when it stood at 106 percent of gross domestic product. But these levels of debt today are more worrisome than in the 1940s. For one thing, the debt levels in the '40s were the product of significant increases in war spending, which naturally went down after the war. In addition, the postwar era experienced a fast-growing economy, which also helped lead to major reductions in debt levels.
That is not going to happen today. CBO projects meek economic growth all the way to 2046, along with large increases in spending levels. That means that unless we get a major breakthrough in technology or a life-altering discovery (which could happen, of course), I wouldn't count on post-WWII reduction in deficits and debt and growth levels.
But debt and deficits are only a symptom of a deeper problem; spending is growing faster than revenue. While revenue will grow from 18.2 percent of GDP today to 19.4 percent by 2046 (when the 50-year average will be 17.4 percent), spending will explode from 21.1 percent of GDP today to 28.2 percent of GDP in 2046 (when the 50-year average will 20.2 percent).
The drivers of our future debt, CBO reminds us, are still the so-called entitlement programs -- government-provided health care spending, in particular. It doesn't mean that Social Security is not a problem, because it is -- as is the large growth in interest payments on our debt. But you wouldn't know that by listening to the vague policy options on the campaign trail or in Washington, where talks of expanding Social Security, adding a public option to the Affordable Care Act and not touching Medicare are very popular.
Each day of the Republican National Convention had a different theme. Monday's theme was "Make America Safe Again." Another was "Make America First Again." Maybe someone should suggest that we "Make America Sustainable Again."
Thanks scumbag mullah obama and democrats for your horrendous contribution to our national debt.
Won’t happen so long as half or more of our voters expect the government to give them stuff.
... 141 percent in 2046...
Simple. Raise tax rates to 141%.
It can be done. 90% income tax plus 50% combination of inflation and direct wealth tax. Everyone slides backwards, quickly.
I have been proposing 100% wealth tax on democrats for years.
Not income but wealth - add the value of their house, auto, clothes and healthcare - that is what they are taxed. If they have a total wealth of $100,000.00 they pay $100,000.00 If they are Bill Gates they pay $40 billion
Apply it to anyone that voted for a demonrat in the previous election
And when an attack on our country happens whether islamic or a deranged democrat, they will blame Trump over and over for his words against islam and democrats.
We need a President (and a Congress) with the stones to tell them "NO! The gravy train has derailed. You're not getting free stuff any more."
I don’t doubt it one bit. The left is so predictable.
Hey, don’t give em any ideas.
Back last year, I opined that we had three options for President in 2016:
(1) Cruz
(2) Trump
(3) We’re screwed.
(1) Crashed and burned.
(2) is what we have ... we’ll see what good it does. If Trump hasn’t the stones to cancel the Gibsmedat Gravy Train, then ...
(3) we’re screwed anyway.
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