The CBO just produced a new report called "The Long-Term Budget Outlook". Under the "alternative fiscal scenario", they say that after 2020 "the growing imbalance between revenues and noninterest spending, combined with spiraling interest payments, would swiftly push debt to unsustainable levels", and that debt as a share of GDP would reach 185% by 2035. (For this purpose they define debt as including only debt held by the public).
The alternative fiscal scenario assumes that "most of the provisions of the 2001 and 2003 tax cuts would be extended", which is unlikely. However, I doubt that the repeal of those provisions, which will kick in in 2011, will bring as much revenue as they are projecting because of the recession we are in. The scenario also assumes that "spending on activities other than the major mandatory health care programs, Social Security, and interest would fall below the average level of the past 40 years relative to GDP". This is also unlikely, since Congress loves to spend money.
I think that neither of the scenarios they present is realistic. They should use the revenue figures based on the repeal of the Bush tax cuts, but lower them slightly to account for the recession. Then they should assume that spending will continue as it always has and maybe even increase slightly. This would produce something like my 2028 projection.
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