The Congressional Budget Office has issued a major warning alongside its latest projections that show the current path the U.S. federal government is on concerning debt is terrifying for the future of our nation. The government’s debt is set to go up from 97 percent of GDP last year to 116 percent in the next decade, which is a higher number than in Second World War. Actually, the outcome for now looks even worse for the future than it did at that time in history.
Thanks, Biden.
Here are some details from Yahoo:
From tax revenue to defense spending and interest rates, the CBO forecasts released earlier this year are underpinned by rosy assumptions. Plug in the market’s current view on interest rates, and the debt-to-GDP ratio rises to 123% in 2034. Then assume — as most in Washington do — that ex-President Donald Trump’s tax cuts mainly stay in place, and the burden gets even higher.
With uncertainty about so many of the variables, Bloomberg Economics has run a million simulations to assess the fragility of the debt outlook. In 88% of the simulations, the results show the debt-to-GDP ratio is on an unsustainable path — defined as an increase over the next decade.
The Biden administration says its budget, featuring a slew of tax hikes on corporations and wealthy Americans, will ensure fiscal sustainability and manageable debt-servicing costs.
President Biden is doing his best to pretend like his economic policies are not an absolute dumpster fire, but the American people aren’t stupid. All we need to do in order to see that this man is lying to us about the current state of the economy is to see if his lips are moving. Or go to the local grocery store and buy a loaf of bread and some milk. That’ll do the trick.
“I do believe we need to reduce deficits and to stay on a fiscally sustainable path,” Treasury Secretary Janet Yellen went on to tell lawmakers in February. Biden administration proposals offer “substantial deficit reduction that would continue to hold the level of interest expense at comfortable levels. But we would need to work together to try to achieve those savings.”
You see, the main problem on getting a plan like this to be a success is that it requires action to be taken by Congress, and at the moment, it’s fairly divided along partisan lines. Members of the GOP, who run the House of Representatives, want to see some major spending cuts to help reduce the deficit, though the water’s a little muddy when it comes to determining what exactly is to be slashed.
Then you have Democrats, who are in charge of the Senate, are attempting to convince everyone that spending isn’t as much of a contributor to deterioration in debt sustainability, with both interest rates and tax revenues being the key factors. And, unfortunately, neither party is willing to make the hard call and make some reductions to benefits being provided to Americans via our bloated entitlement programs.
“In the end, it may take a crisis — perhaps a disorderly rout in the Treasuries market triggered by sovereign US credit-rating downgrades, or a panic over the depletion of the Medicare or Social Security trust funds — to force action. That’s playing with fire,” Yahoo concluded.
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