Tags: budget | federal | deficit | Congressional Budget Office

CBO: Record Federal Deficit Outlook Bleak, Getting Worse

Image: CBO: Record Federal Deficit Outlook Bleak, Getting Worse
Office of Management and Budget Director Mick Mulvaney, R-S.C. (AP Photo/Manuel Balce Ceneta)

Thursday, 30 Mar 2017 08:12 PM

U.S. debt held by the public is set to hit 77 percent of economic output by the end of this year, the highest level seen since shortly after World War II, according to the Congressional Budget Office's 2017 long-term budget outlook.

Federal debt held by the public – the amount the federal government borrows from financial markets – has ballooned over the past decade, The Washington Free Beacon reported.

For example, the CBO report said, in 2007, debt held by the public represented 35 percent of the gross domestic product, or GDP. Five years later, federal debt held by the public doubled to 70 percent and is projected to continue rising.

Debt has not seen a surge this large since the increase in federal spending during World War II, when debt exceeded 70 percent of GDP, the report noted. The budget office projects growing budget deficits will cause the debt to increase sharply over the next three decades, hitting 150 percent of GDP by 2047.

The explanation for the CBO's bleak finding is simple: the government spends more money than it takes in, and that gap is projected to widen, CBS News reported.

The swelling deficits will be driven primarily by increased spending in three areas, according to the CBO: Social Security, healthcare entitlement programs like Medicare and Medicaid, and interest on the debt.

Former Sen. Judd Gregg, R-N.H., and former Gov. Ed Rendell, D-Pa., the co-chairmen of the Campaign to Fix the Debt, highlighted the impact of those increased interest payments, per CBS News.

"This year, we will spend as much on interest as on the Departments of Homeland Security and Veterans Affairs combined, and in 30 years we will spend more on interest than on Medicare," Gregg and Rendell said in a statement.

"Meanwhile, an aging population and rising health costs means that Social Security, Medicare, and Medicaid will grow significantly while revenue fails to keep up. This formula means higher debt, lower household incomes, endangered trust funds, and a future where policymakers have little wiggle room to invest in important priorities or respond to a crisis."

Reuters contributed to this report.

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
Newsfront
U.S. debt held by the public is set to hit 77 percent of economic output by the end of this year, the highest level seen since shortly after World War II, according to the Congressional Budget Office's 2017 long-term budget outlook.
budget, federal, deficit, Congressional Budget Office
354
2017-12-30
Thursday, 30 Mar 2017 08:12 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved