“Unsustainable”

Full pdf: http://www.cbo.gov/ftpdocs/115…

CBO director’s blog report: http://cboblog.cbo.gov/?p=1112

The Congressional Budget Office issued a new report today on the long term national debt.  This is the first such report that includes the new health care costs.  The graph to the left shows two projections.  The top line (higher debt) show what the CBO estimates will happen under current laws.  The bottom line shows what will the CBO estimates will happen with “possible changes” in our spending laws.  Here are some of their findings:

Government controlled health care creates rising costs and rising debt.

CBO projects that if current laws do not change, federal spending on major mandatory health care programs will grow from roughly 5 percent of GDP today to about 10 percent in 2035 and will continue to increase there after.

Our debt problems are a lot worse now than they were when Obama took office.  This is not simply a problem he inherited.

The federal government has recently been recording the largest budget deficits, relative to the size of the economy, since 1945. As a result, the amount of federal debt held by the public has surged. Debt is expected to equal 62 percent of the economy’s annual output, or gross domestic product (GDP), at the end of this fiscal year, up from 40 percent at the end of 2008.

MORE BELOW THE FOLD….

Spending needs to be radically reduced.  The long term impact on the economy is catastrophic.

The Impact of Growing Deficits and Debt  

In fact, CBO's projections understate the severity of the long-term  budget problem because they do not incorporate the significant negative  effects that accumulating substantial amounts of additional federal debt  would have on the economy:

  • Large budget deficits would reduce national saving, leading to  higher interest rates, more borrowing from abroad, and less domestic  investment-which in turn would lower income growth in the United States.
  • Growing debt would also reduce lawmakers' ability to respond to  economic downturns and other challenges. 
  • Over time, higher debt would increase the probability of a fiscal  crisis in which investors would lose confidencein the government's  ability to manage its budget, and the government would be forced to pay  much more to borrow money.

developing….

About Mike "DD4RP" Rossettie

  • …because Mike spends a lot of time working on these wonky posts, and no one ever comments on them.  

    I will attempt to increase the number of Comments.

    “Charlie Baker is a liberal”

    “Richard Tisei endorsed by NARAL”

    “Tim Cahill is a Hack”

    “Tim Cahills third choice for a running mate, what’s his name.  The one Sheehan works for.”

    No?  Not working?  Sorry Mike, I tried.

  • Would get 100+ comments if you include “Joe Sheehan” in the title……

    just sayin…………

  • As the federal debt grows larger and larger, do you think that states (such as Massachusetts) should attempt to reduce the amount of money they receive from the state and then spend?

    I think Deval’s recent reliance on federal money that never came shows the import of relying less on the government.

    Should states attempt to wean themselves off fed money? Would you like this to be a priority of any new administration (Cahill or Baker)?