Even the CBO Director is now publicly stating that the debt is looking far worse. The official CBO baseline is cooked up using very constrained, often unrealistic, assumptions under current laws. The CBO has also released an "Alternative Fiscal Scenario" which adjusts projections for things such as an increase in interest rates (the low levels now are unprecedented and unsustainable). The alternative scenario shows Debt to GDP ratios exceeding 175% within 20 years - and this doesn't address unfunded Social Security liabilities which are not included in the official debt levels. Although deficits during or shortly after a recession generally hasten economic recovery, persistent deficits and continually mounting debt would have several negative economic consequences for the United States. Some of those consequences would arise graduallybut a high level of federal debt, combined with an unfavorable long-term budget outlook, would also increase the probability of a sudden fiscal crisis prompted by investors fears that the government would renege on the terms of its existing debt or that it would increase the supply of money to finance its activities or pay creditors and thereby boost inflation. The resulting abrupt rise in interest rates would create serious challenges for the U.S. government. For example, a 4-percentage-point across-the-board increase in interest rates would raise federal interest payments next year by about $100 billion; if those higher rates persisted, net interest costs in 2015 would be nearly double the roughly $460 billion that CBO currently projects for that year. Such an increase in rates could also precipitate a broader financial crisis because it would reduce the market value of outstanding government bonds, inflicting losses on mutual funds, pension funds, insurance companies, banks, and other holders of federal debt. Director's Blog Blog Archive Federal Debt and the Risk of a Financial Crisis Conclusion: The CBO Office declares Obamanomics to be an Epic Fail.