Tuesday, January 19, 2016

What a difference five months makes

The projections in August 2015 were that the long-term national debt would stabilize at about 77% of GDP.  Now, the debt will reach 86% of GDP within 10 years and keep rising.

"The near record-high national debt is on an unsustainable path. CBO now projects deficits more than tripling, from $439 billion in 2015 to $1.37 trillion by 2026, with trillion dollar deficits returning by 2022 – three years earlier than prior projections. Debt held by the public, meanwhile, will grow by over $10 trillion from $13.1 trillion at the end of 2015 to $23.8 trillion by 2026. As a share of Gross Domestic Product (GDP), debt will grow from 74 percent of GDP in 2015 – already twice its pre-recession levels – to 86 percent of GDP in 2026. By comparison, August projections showed debt on track to reach roughly 77 percent of GDP, or $21 trillion, by 2025."
--http://crfb.org/blogs/deficits-rise-latest-budget-projections

Once trillion dollar deficits return, it will be almost impossible to ever cut them, because most of the deficits will be made up of social programs and interest on the debt.

I actually expect trillion dollar deficits to return next year, as a reaction to the "Greater Recession" (I just made that up).

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