Federal Debt Held by the Public Under CBO's Two Budget Scenarios (As a percentage of GDP)
The Graph of the Week comes from the Congressional Budget Office's recent release of The Long-Term Budget Outlook. From The Director's Blog
Today CBO released the Long-Term Budget Outlook. Under current law, the federal budget is on an unsustainable path—meaning that federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the U.S. population will cause federal spending to increase rapidly under any plausible scenario. Unless tax revenues increase just as rapidly, the rise in spending will produce growing budget deficits and accumulating debt. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress income growth in the United States./p>
The CBO is one of the data sources listed in NABE's collection of Macroeconomic Links, and the director's blog has been added to our Economic Blogs page.