This morning, the Congressional Budget Office released its updated long-term budget projections. Needless to say, the picture is very unpleasant.
The basics haven’t changed all that much from last year’s extremely grim projections, but our troubles are coming at us faster. The debt projections in the document are the easiest way to see that. In last year’s Outlook document, CBO projected that our national debt would be 91% of GDP in 2021; they now say it will be 101% of GDP in 2021—that is, a decade from now our debt will be larger than our economy, and of course still growing quickly. By 2030, they project it will top 150% of GDP, and by 2037 it will be 200% of GDP. They assume it will continue to grow swiftly after that, but (although they extend long-range projections for spending and revenues all the way to 2085) their specific numerical projections for debt stop after 2037, when we cross 200% of GDP. We should probably be grateful for that, as the figures beyond that would only depress us all the more.
Of course, this is only what will happen if we fail to change course—if we do not reform our entitlements, replace Obamacare with a reform that will meaningfully curtail the growth of health-care costs, and reduce our discretionary spending. In other words, the grim future CBO envisions is a choice we would make by continuing along our current path. That is apparently what President Obama and his party want to do. But surely America can do better.