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How About Some Debt To Go With That Debt? July 13, 2016

Posted by geoff in News.

Not much to like in the latest CBO Long-Term Budget Outlook report. Debt, debt, and more debt. Here’s the projection compared to historical debt levels (all charts taken from the CBO report):


Depressing, but at least it’s a pretty chart. You might ask yourself, “Hey winsome IB reader, does that debt come from too much spending or not enough revenues?” So here’s that chart:


Yup, spending is the culprit, rising from its historical (post-WWII) level of 19-20% to 28.3% by 2046 (30 years from now). Inexorably rising, I should have said.

The debt projection has gotten much worse in only one year, so you can look forward to next year’s projection:


How to fix it? Here are some scenarios:


Yup, you’d have to cut more than $2 trillion out of the budget to keep the debt level the same as it is today, and $4 trillion to get it back to pre-Obama levels.

If you compare the likelihood of Congress making those cuts to the likelihood of Congress increasing spending over current levels (via, say, more entitlement programs), I think you’ll agree that the CBO’s most pessimistic curve (the top one) should be the baseline.

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