Intelligent fiscal discipline isn’t passé
FocusM | 08 Mar 2019 00:30
The Congressional Budget Office (CBO) recently released its revised Budget and Economic Outlook.
Its economists estimate that, on present policy, annual deficits of a trillion dollars - between 4% and 5% of gross domestic product (GDP) - will persist over the next decade.
They expect this to push government debt from 78% of GDP to 93% by 2029. Remember that the US is at or close to full employment.
Note as well that the CBO’s numbers assume that automatic corrective measures built into current legislation will be allowed to take effect.
On the alternative and up-to now reliable assumption that they’ll be blocked, the debt would rise to 105% after 10 years. Beyond the end of the decade, even on the more favourable projection, debt would keep on going up - passing 150% of GDP by 2049.
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