Thursday, June 13, 2013
30 year deficit to exceed $100 trillion
Source:http://www.nationalreview.com/article/350983/ron-johnsons-transformative-proposal-jonathan-strong
The deficit over the next 30 years will exceed $100 trillion, as will the national debt. The biggest problem is interest which will exceed 8.5% of GDP by 2034. I previously thought that interest exceeding 5% of GDP indicates a serious problem.
Update: I tried to recreate the numbers, and while I don't have them exactly, I think I am close. Using similar assumptions, this shows that the annual deficit will be $896 billion in 2023 (per the CBO), then it will jump to $1.5 trillion in 2024, $2.2 trillion in 2027, $3.2 trillion in 2030, and $4.0 trillion in 2032. The main cause is high interest payments - over $1 trillion/year by 2026 and $2 trillion by 2033. But it also forecasts high defense spending, jumping from $600 billion/year in 2023 to $1.0 trillion in 2024. I think the forecast is too pessimistic. But then again, the SS trust fund will run dry by 2033, and we are certain to have another recession by then. And just cutting defense spending won't solve the problem.
So I give the Senate Republicans an A for effort. I'd like to see the CBO projections for the year 2024 and following, but they don't want to discuss it.
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