(AmericanProsperity.com) – The state of our national deficit has been a long-standing issue, but unprecedented government spending and lower revenues this year wreaked havoc on the numbers. Federal debt hit a historic high — or low — depending on how you look at it according to a report from the Congressional Budget Office (CBO).
The CBO expects the federal budget to have a $3.3-trillion deficit this year, which equates to 16% of the gross domestic product (GDP). This is the largest it’s been since 1945.
Meanwhile, the federal debt held by the public is expected to hit 98% by year-end, compared to only 79% in 2019. The CBO projects it to stay well over 100% through 2030.
Major federal trust funds are also set to run out, including the Highway Trust fund in 2021, the Medicare Hospital Insurance Trust Fund in 2024, and Social Security Old-Age and Survivors Insurance Fund in 2031.
In response to this startling outlook, the Committee for a Responsible Federal Budget released an analysis, cautioning against more fiscal relief that would raise the debt to 121% by 2030. The Director of the Hutchins Center on Fiscal & Monetary Policy at Brookings shares the report here:
CRFB: If Congress adds $1 trillion in fiscal support, extends most expiring tax cuts and grows discretionary spending with the economy (instead of inflation), deficits will total $20 trillion through 2030 vs $16.3 trillion in CBO current-law projections. https://t.co/PZI5Dgmykh
— David Wessel (@davidmwessel) September 3, 2020
If federal debt continues to run unchecked, it won’t just be future generations bearing our burdens of fiscal irresponsibility. Now, it appears we may have to face the debt ourselves in the coming years.
~Here’s to Your Prosperity!
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