The group said that “costly legislative and executive actions” have worsened the debt to GDP ratio since CBO’s May estimate
Casey Harper
The Center Square
New budget estimates show that the growth of the national debt is worse than previously thought.
The U.S. Congressional Budget Office released projections in May that the national debt will hit 110% of U.S. Gross Domestic Product by 2032. Now, with interest rates higher and GDP growing more slowly, a leading budget group has released more dire projections.
The Committee for a Responsible Federal Budget raised the alarm, saying that the federal debt will be 116% of GDP in 2032 but could even reach as high as 138% of GDP in 10 years. The group said that “costly legislative and executive actions” have worsened the debt to GDP ratio since CBO’s May estimate.
“Under our updated baseline scenario, which incorporates these factors and also subtracts about $920 billion of borrowing for baseline adjustments related to the infrastructure bill, we find debt would reach a massive 116 percent of GDP by 2032,” the group said in its analysis.
The U.S. Federal Reserve has hiked interest rates to deal with soaring inflation, making all debt more costly, including that held by the federal government.
“Under a more pessimistic (and in many ways realistic) scenario, debt in 2032 would reach 138 percent of GDP, deficits would reach 10.1 percent, and interest would total 4.4 percent of GDP,” the group said. “These projections suggest an unsustainable fiscal trajectory”
The U.S. national debt surpassed $31 trillion last month after surpassing $30 trillion earlier this year. Lawmakers are reportedly mulling new tax breaks at the end of this year as well.
“We are asking lawmakers to take one small step towards fiscal responsibility and agree there should be no new borrowing for the remainder of 2022,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “There is not one single economic justification to borrow rather than pay for any new priorities … it will be good practice for politicians to break their addiction to debt.”
This story was first published by The Center Square.
Also read:
- Signatures delivered to City Hall from Save Vancouver Streets campaignSave Vancouver Streets delivered over 6,500 signatures to City Hall, aiming to ensure public input on traffic lane removal.
- Vancouver Police planning for election weekVancouver Police are increasing staffing and preparing for election week to ensure public safety and support lawful assembly.
- Election day stress weighing on you? Recent studies suggest you’re not aloneWith the upcoming election, many voters are experiencing stress and anxiety, as highlighted in a recent report by the American Psychological Association.
- Opinion: Unemployment Insurance Trust Fund dodged a Boeing-size bulletElizabeth New (Hovde) discusses the implications of the Boeing strike and the push for unemployment insurance for striking workers in Washington stat
- Amazon founder dodges $1.2B in WA capital gains taxes in 2024 after latest stock saleJeff Bezos avoids significant capital gains taxes in Washington by selling shares after relocating to Florida.
- Clark County Jail Services’ statement regarding release of inmateClark County Jail Services erroneously released inmate Maurice Xavier Haynes.
- Clark College 9th Annual Fall Choral Festival to be held Nov. 15The Clark College 9th Annual Fall Choral Festival on Nov. 15 will showcase performances from local middle and high school choirs.