Here is my latest deficit forecast, showing a breaking point in 2059. This is based in part on the CBO forecast at https://www.cbo.gov/data/budget-economic-data (see the Feb 2024 10 year forecast and Mar 2024 long-term budget projections).
I assume that nominal GDP will increase by 5.5% per year. (This 5.5% comes from one of the estimates prepared by Social Security).
The expenditures as a percent of GDP comes from CBO, and I use its numbers through 2054, and then I use the same number for 2054, (which is 21% of GDP), for later years.
I made one change to their model starting in 2035, where I increase expenditures by 1% per year to account for the Social Security trust fund running out. This increases expenditures by about $500 billion in 2035. This 1% increase is arbitrary and I don't know if it will be enough to close the gap.
This shows $100 trillion in Debt to the Public being reached in 2044. Earlier, I speculated that this $100 trillion could be reached as soon as 2038, so this is a more positive estimate.
My last forecast showed a breaking point in 2039. The main differences between this forecast and that one is here I am showing much higher GDP growth and also assuming lower interest rates.
So if the system can remain pretty much as is until 2059, then we are good, right? And I can finally close this blog and stop worrying.
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Update: This is already obsolete. The GDP forecast is too optimistic, and maybe 5% GDP growth is a better figure to use. But I want to wait until fiscal year 2024 is over and the results in before updating this again. So I won't update this until after the election on November 5. It doesn't matter who wins, we are doomed in about 15 to 20 years anyway.
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