A national debt 6 times the size of the economy?
By the time a child born in 2018 is settling into retirement, the national debt could be six times the size of the American economy.
Without making any changes to current policy—in other words, even without the glut of new entitlement spending proposed by some of Bernie Sanders’ acolytes—that’s the trajectory for the national debt over the rest of the 21st century, according to the Congressional Budget Office (CBO). It’s an outlook that the Committee for a Responsible Federal Budget (CRFB), in an analysis released this week, calls “frightening and almost certainly unsustainable.”
Under current law—which assumes, among other things, that last year’s tax cuts will expire in 2025 and not be extended—the national debt will double from 78 percent of gross domestic product (GDP) this year to 160 percent of GDP by 2050. It would hit 360 percent of GDP, and still be climbing, by the end of the CBO’s 75-year projection window in 2093. In the so-called “alternative fiscal scenario,” which assumes current policies (such those tax cuts) are kept in place, the debt would hit 225 percent of GDP by 2050 and more than 600 percent of GDP by 2093.
Projections for the year 2093 are only so useful at a political moment when predicting what will happen in 11 days is difficult enough, but the CBO’s 75-year budget forecast (its longest of long-term projections) makes it clear that the current budgetary course must change.
In some ways, the alternative scenario is likely to be more accurate because it filters out gimmicks written into law. Republicans included an expiration date in their tax bill to improve the legislation’s CBO score, but they have already started moving to repeal it…