No one listens. There’s nothing new or unexpected in the report but it is nonetheless alarming.
The report shows:
Debt Is Rising Unsustainably. CBO projects debt held by the public will roughly double as a share of the economy under current law, from 78 percent of GDP at the end of 2018 to 152 percent of GDP in 2048 – an unprecedented level.
Spending Is Growing Faster Than Revenue. CBO projects spending will grow rapidly, from less than 21 percent of GDP in 2018 to over 29 percent by 2048. Revenue will grow slowly, from less than 17 percent of GDP in 2018 to nearly 20 percent of GDP. As a result, annual deficits grow from 3.9 percent of GDP in 2018 to 9.5 percent by 2048, approaching the post-World War II record set in 2009.
Recent Legislation Will Substantially Worsen the Long-Term Outlook if Extended. Because the unpaid-for 2017 tax law and 2018 spending deal were largely temporary, they have little effect on CBO’s long-term debt estimates under current law. We estimate debt would be about 50 percent of GDP higher in 2048 – roughly 200 percent of GDP – if temporary provisions were extended.
High And Rising Debt Will Have Adverse and Potentially Dangerous Consequences. The fiscal situation will lead to slower economic growth, lower income, higher interest rates, ballooning interest payments, reduced fiscal space, weakened international leadership, and an increased likelihood of a fiscal crisis.
Major Trust Funds Are Headed Toward Insolvency. CBO projects the Highway, PBGC Multi-Employer, Social Security Disability Insurance, Social Security Old-Age and Survivors Insurance, and Medicare Hospital Insurance trust funds will all be exhausted by 2032 without action to stabilize their finances.
Fixing the Debt Will Get Harder the Longer Policymakers Wait. Delaying necessary deficit reduction will mean larger spending cuts and tax increases concentrated on fewer people. CBO estimates the size of the needed adjustment would grow by half if policymakers waited just ten years to take action.
Lawmakers need to work together to address this bleak fiscal picture now so problems do not compound any further.
Why does anyone even bother with the “lawmakers must act!” bit anymore? They’re not going to do anything other than say they’ll act – as they’ve said for decades now. Big hat, no cattle? Big debt, no Congress.
There are some scary facts hidden in there, along with some boring charts. We’ve covered the “held by the public” obfuscation before. But there is a silver bullet for all of this: total debt absolution. Look for it around the time of the Second Coming.
Boring chart. CBO.