According to the Congressional Budget Office the national debt will reach 100% of GDP in 25 years. Since government bureaucrats routinely underestimate spending and debt it will probably be even worse than that. They actually admit that it could be worse. But of course, President Obama refuses to negotiate on the debt ceiling.
Congressional budget analysts on Tuesday issued a stark new warning about the long-term U.S. budget outlook, just as lawmakers and the White House are staring at a pair of fiscal confrontations.
The nonpartisan Congressional Budget Office said that the U.S. national debt is now 73% of gross domestic product, the highest in history except for a period around World War II. The figure is twice the percentage it was at the end of 2007. Read the CBO report.
Modestly lower spending, an improving economy and increased collection of income, payroll and corporate taxes have helped narrow the government’s deficit this fiscal year. If current laws remain in place, CBO said, the debt will decline “slightly” relative to GDP over the next several years — totaling 68% of the economy by 2018.
But CBO cautioned that long-term challenges remain. It warned that under current law, growing future deficits will push the debt to 100% of GDP 25 years from now. And under another scenario that envisions changes being made to some laws — including removing the so-called automatic budget cuts known as the sequester — the debt would be even higher, at nearly 190%, by 2038. (Read More)
In fact, tax collection has set a new record, yet there is still a huge deficit because they refuse to stop spending so much.
The CBO also said that to preserve Social Security for another 25 years the payroll tax will need to be increased by 3.4%.