The 2012 Long-Term Budget Outlook
1. Over the past few years, the federal government has been recording budget deficits that are the largest as a share of the economy since 1945. Consequently, the amount of federal debt held by the public has surged. By the end of this year, CBO projects that the federal debt will reach roughly 70 percent of gross domestic product (GDP), the highest percentage since shortly after World War II.
2. Whether that debt will continue to grow in coming decades will be affected by long-term demographic trends (particularly the aging of the population), economic developments, and policymakers’ decisions about taxes and spending.
3. In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower the growth of incomes in the United States.
Edited per board copyright rules
CBO | The 2012 Long-Term Budget Outlook
1. Over the past few years, the federal government has been recording budget deficits that are the largest as a share of the economy since 1945. Consequently, the amount of federal debt held by the public has surged. By the end of this year, CBO projects that the federal debt will reach roughly 70 percent of gross domestic product (GDP), the highest percentage since shortly after World War II.
2. Whether that debt will continue to grow in coming decades will be affected by long-term demographic trends (particularly the aging of the population), economic developments, and policymakers’ decisions about taxes and spending.
3. In particular, large budget deficits and growing debt would reduce national saving, leading to higher interest rates, more borrowing from abroad, and less domestic investment—which in turn would lower the growth of incomes in the United States.
Edited per board copyright rules
CBO | The 2012 Long-Term Budget Outlook