CBO: Debt to GDP ratio will double in 30 years; Another analysis says total debt will top $37 trillion by 2030

[SirLinksALot]

SOURCE: AMERICAN THINKER

URL: http://www.americanthinker.com/blog/2016/07/cbo_debt_to_gdp_ratio_will_double_in_30_years.html

by Rick Moran


Most people's eyes glaze over when you start talking about government debt.  This is especially true when you start talking about what the debt will look like 30 years from now.  Somehow, we're able to convince ourselves that it's just not relevant to us, that it's for the next generation to deal with.

The problem with that thinking is that it's grossly unfair to our grandchildren as well as being incredibly shortsighted.  Action now on reducing the debt would be far less painful than waiting until the crisis becomes unmanageable.  But it's hard to convince people of that.

It's even harder to convince lawmakers who are professional procrastinators, trained to ignore a problems and kick the can down the road.  But the CBO's estimate of the ratio of debt to GDP by 2046 should, at the least, get a converation started.

From the Washington Free Beacon:

Federal debt held by the public will nearly double as a percentage of gross domestic product over the next 30 years, according toprojections from the Congressional Budget Office.

Federal debt held by the public in 2008 was equal to 39 percent of GDP, and has risen to 75 percent of GDP today. The budget office predicts this debt will rise to 86 percent of GDP in 2026 and to 141 percent in 2046, which would be the highest ratio of debt to GDP ever recorded. The current high ratio of 106 percent was recorded just after World War II.

The debt is projected to increase because the government is spending outside of its means, especially on entitlement programs like Social Security and Medicare. The government is also paying increasing amounts of interest on its debt.

Social Security and Medicare spending alone is projected to account for about half of all federal noninterest spending in the next 30 years. “Federal outlays for those two programs made up almost 40 percent of the government’s noninterest spending, on average, during the past 10 years, compared with 16 percent 50 years ago,” the report states.

The budget office projects that the Social Security program will be insolvent in the next few years. According to their projections, the Disability Insurance trust fund will be exhausted in fiscal 2022 and the Old-Age and Survivors Insurance trust fund will be exhausted in calendar year 2030.

Federal spending on major health care programs such as Medicare, Medicaid, and the Children’s Health Insurance Program as well as health insurance purchased through the Obamacare exchanges will rise to 8.9 percent of GDP in the next 30 years, 60 percent higher than it is today. Medicare is the biggest driver of spending in this category as it accounts for about three-quarters of the increase in federal spending as a share of GDP.

CLICK ABOVE LINK FOR THE REST....

[Free Vulcan]

Do people not get that we pay interest on the debt, which comes out of the budget? What are we going to do when the interest starts eating up a significant portion of the budget? Do we think people are going to lend us more money bearing interest to pay for interest on older borrowings?

This assumes we stay crusing along at an average 2% or so interest rate on govt borrowings. What if that goes to say, 6 or 8%? Do the math.

What are we going to do if we have another recession like the last one? If tax revenues slump and spending soars in proportion to last time, we will be running $2T and greater deficits. Who's going to fund that?

How then are we going to pay for social programs? Welfare, health care, social security? Answer is we won't. Cities will burn, elderly will suffer if not die, the economy will fall into depression.

I truly can't believe the level of stupidity this nation has acheived.

[SirLinksALot]

I truly can't believe the level of stupidity this nation has acheived.

Over 10 years ago, a Greek businessman friend of mine echoed the exact sentiments about his country when we had a long lunch in New York City.

Nothing ever came out of his dire warning because most of his country men just assumed that things will remain the way they are.... UNTIL....(you know the rest of the story ).

[Fishrrman]

This doesn't matter anymore.
No, it doesn't.

As someone wise once observed, it took the Soviets fully 70 years to reach the point of economic collapse, and they started out with far FAR less than we did.
70 years.

As the debt mounts, and then mounts higher, those in power will use whatever machinations they can to shuffle it around, again and again and again and again.

If it took the Soviets 7 decades, I figure at least 80-100 years (or more) here before the point is finally reached beyond which things simply collapse under their own weight regardless of what the government tries to do to control or mitigate it.

The democrats aren't going to try to fix things -- they'll keep piling on more and more "free stuff" for "the disadvantaged". Let the good times roll.
The Republicans aren't going to attempt a "real fix" either -- because to do so would most certainly make them "racis's", etc. You can't fix things without cutting out the entire "safety net". You can't "right the ship of state" without throwin' a lot of stuff overboard.

Nope.

The gub'mint keeps rollin' on like a train with no brakes downhill.
The only thing that will "stop it" is.... the wreck.

(Aside: I know what it's like to be at the throttle of a train headin' downhill quite a bit faster than it's supposed to be goin' - because I was there!)

[MajorClay]

At some debt to GDP ratio the economy would collapse.