A new report from the Congressional Budget Office said the government simply can’t continue going on the way it has been — at least not under current law.
Federal debt will continue to grow much faster than the economy over the long run, and rising costs for health care for an aging population only will make matters worse.
“Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits,” according to the report, which will result in more borrowing overseas, less domestic investment and further harm to the U.S. economy.
In other words, the government either has to spend a lot less or tax a lot more.
Almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs -- Medicare, Medicaid, and Social Security.
According to the CBO, if current laws do not change federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP to almost 10 percent by 2035.
By 2080, the government would be spending almost as much, as a share of the economy, on its two major health care entitlement programs as it has spent on all of its programs and services in recent years.
The unfunded entitlement debt for the Social Security and Medicare programs has reached $59 trillion, financial analyst Dick McDonald said.
“That is $500,000 for every one of the 150 million households in America,” McDonald wrote on familysecuritymatters.com.
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