Christopher Jacobs writes for the Federalist about interesting information in a recent Congressional Budget Office report.
As it has often had to do over the past several years, the Congressional Budget Office (CBO) recently released a report illustrating the fiscal problems looming dead ahead for the United States. Its most recent analysis, an annual report estimating the long-term budget outlook, illustrated why Democrats’ “solution” to the problem — namely, massive tax increases — won’t solve our budgetary woes.
According to the CBO report, the federal government faces massive deficits over the next 30 years (the timespan of the analysis). Specifically, “deficits are projected to grow almost every year over the next three decades.” As a percentage of the economy, they would average more than twice the average deficit over the past half-century, growing to reach 10 percent of the entire economy in 2053.
What will cause these deficits? As the CBO report notes, it’s not low levels of federal revenues. In fact, the budget gnomes believe that “revenues measured as a percentage of GDP are projected to be higher than they have been, on average, in recent decades.”
Instead, spending will drive our deficits. Federal outlays will reach levels seen only twice in our nation’s history: during World War II, and during the Covid lockdowns. Spending will rise faster than revenues almost every year, leading to greater and greater federal deficits.
Rising deficits will bring with it rising levels of debt. According to CBO, federal debt as a share of GDP will reach an all-time high in 2029, exceeding levels during and after World War II. But even after reaching 107 percent of the economy six years from now, the debt will rise still further, hitting 181 percent of GDP 30 years from now.
All that debt will lead to higher interest costs, such that net interest costs will nearly triple over the coming three decades after they have already risen sharply over the past two years. By 2051, CBO estimates, we will pay more in interest on the national debt than we will spend on Social Security.
