Under Multiple Budget Scenarios, the Government's Numbers Still Don't Add Up

[Kamaji]

Under Multiple Budget Scenarios, the Government's Numbers Still Don't Add Up

Balanced federal budgets aren’t even considered as a possibility.

J.D. TUCCILLE
7.26.2023

If you're a glutton for punishment, you might be a follower of the Congressional Budget Office's (CBO) depressing analyses of the federal government's fiscal prospects based on tax and spending trends. The term "unsustainable" features frequently, though "fiscal crisis" seems to have recently gained popularity. But circumstances and choices affect outcomes, so the CBO recently peered into its crystal ball based on scenarios that vary from official assumptions about economic conditions and policy choices. The results vary widely, but all examined paths lead to a future of growing debt and a hobbled economy.

For starters, it's worth knowing the CBO's formal projections, as published last month in the 2023 Long-Term Budget Outlook. Reason's Eric Boehm summarized the findings at the time: "The federal government is on pace to borrow $116 trillion over the next 30 years, and merely paying the interest costs on the accumulated national debt will require a staggering 35 percent of annual federal revenue by the end of that time frame." Federal debt will rise from 98 percent of GDP in 2023 to 181 percent in 2053 "and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel more constrained in their policy choices," according to the CBO report.

Frightening Forecast as Best-Case Scenario
But that forecast is based on unrealistically rosy assumptions. Things are likely to be worse.

"In CBO's extended baseline projections, discretionary spending is smaller and revenues are larger, on average, than they have been as a share of GDP over the past 30 years," the CBO notes in The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and the Budget, published last week. "For this report, CBO analyzed a historical-rate scenario in which discretionary spending and revenues (measured as a percentage of GDP) are set for the entire projection period to the average values they had over the past 30 years."

So, if the federal government continues to spend the way it has for three decades, and to collect taxes the way it has for the same period of time, "debt held by the public would exceed 250 percent of GDP by the end of the projection period." What would be the consequences of such staggeringly high national debt on economic growth and American prosperity? The CBO leaves it to our imagination.

*  *  *

Source:  https://reason.com/2023/07/26/under-multiple-budget-scenarios-the-governments-numbers-still-dont-add-up/

[LMAO]

From the article….

"The federal government is on pace to borrow $116 trillion over the next 30 years, and merely paying the interest costs on the accumulated national debt will require a staggering 35 percent of annual federal revenue by the end of that time frame." Federal debt will rise from 98 percent of GDP in 2023 to 181 percent in 2053 "and pose significant risks to the fiscal and economic outlook[/color


Very depressing. And this issue gets scant mention in the Republican primary. I don’t care how large a candidate’s rallies are or how much a candidate fought “woke” in his state. Math always wins And you can’t defeat the law of economics.

This issue is eventually going to bring us to our knees if it’s not addressed. And if you think the economy is poor now and Inflation is bad today, you’ve seen nothing yet

[Kamaji]

From the article….

"The federal government is on pace to borrow $116 trillion over the next 30 years, and merely paying the interest costs on the accumulated national debt will require a staggering 35 percent of annual federal revenue by the end of that time frame." Federal debt will rise from 98 percent of GDP in 2023 to 181 percent in 2053 "and pose significant risks to the fiscal and economic outlook[/color


Very depressing. And this issue gets scant mention in the Republican primary. I don’t care how large a candidate’s rallies are or how much a candidate fought “woke” in his state. Math always wins And you can’t defeat the law of economics.

This issue is eventually going to bring us to our knees if it’s not addressed. And if you think the economy is poor now and Inflation is bad today, you’ve seen nothing yet

Very true.

[DefiantMassRINO]

The problem is we have been avoiding consequences by kicking the can down the road.

Deficit and debt hawks sound like Chicken Littles ... until its too late.

The Republicans will favor growing GDP.

Dems will favor increasing taxes.

Neither will reduce spending because that's the flame that draws in the moth of personal profits from lobbying, influence peddling, insider trading, and conflicts of interest.

[LMAO]

The problem is we have been avoiding consequences by kicking the can down the road.

Deficit and debt hawks sound like Chicken Littles ... until its too late.

A poster on this forum called those of us who are concerned about the debt and deficit “fiscal loons”

I prefer that over “chicken Littles”

[Fishrrman]

There's really no point in arguing about this.

Regardless of who is in control, based on what we've seen over the last 40 years or so, "the numbers" are NEVER going to "add up". Not under the current system of government...