The Congressional Budget Office stated on Wednesday that the United States is headed toward nearly doubling its government debt over the following ten years.
According to the nonpartisan office’s revised Budget and Economic Outlook for the coming ten years, the federal budget deficit will hover around $2 trillion each year on average. According to the CBO, by 2033, the total federal debt held by the public will increase by $22.1 trillion, from $24.3 trillion this year to $46.4 trillion.
“In 2023, the deficit is 5.3 percent of GDP; it rises to 6.1 percent of GDP in 2024 and 2025; and then it falls in the two years that follow. Deficits start to rise again after 2027 and hit 6.9 percent of GDP in 2033, a number that has only been exceeded five times since 1946,” according to the CBO’s study.
The projected deficit for this year is $1.4 trillion. The CBO predicts a $2.7 trillion budget deficit in 2033.
After the report’s afternoon release, CBO director Phillip Swagel told reporters at a press conference that “the debt trajectory is unsustainable.” He stated, “At some point, something has to give – whether it’s on expenditure or revenue. But the CBO can’t tell Congress what to do.”
According to the CBO’s estimates, a new era of substantial government spending and taxes is beginning. Through 2033, spending and revenue as a proportion of GDP will be at or above their 50-year averages. By historical standards, spending is up from 23.7 percent of GDP this year to 24.9 percent in 2033. The CBO claims that this increase is mostly the result of more spending on programs that help senior citizens and rising interest rates.
According to the CBO, revenues will represent 18.3% of GDP in 2023. Following 2025, when some elements of the 2017 Trump tax reductions are expected to expire, the agency predicts that they will rise after a two-year decline. After 2027, revenues are predicted to remain largely steady, reaching 18.1 percent of GDP in 2033.
The federal govt’s debt is expected to increase annually relative to the size of the economy, peaking at 118 percent of GDP in 2033, which would be an all-time high. The CBO noted that if present rules stayed in place generally, debt would continue to rise in the ensuing years.