CBO: Debt will be 90% of GDP by 2020
I’m sure this is a CBO report (the “gold standard” remember) that Democrats and the administration will try to ignore. Especially since adding to the debt so significantly with ObamaCare.
President Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported Thursday.
In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president’s budget would generate a combined $9.75 trillion in deficits over the next decade.
Of course that’s a static assessment that assumes nothing changes over the next few years. Or said another way, if left to their devices, this is precisely what Democrats and this administration plan for our future. And all the denial in the world won’t change that. This is a plan for fiscal ruin.
To put it in a more easily understandable context:
The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates.
That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America’s debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.
So, is it time to demand those calling the path we’re on “unsustainable” (i.e. Timothy Geithner, Barack Obama and the Democratic Congress) to put up or shut up? As usual, we continue to hear Democrats blather on about PAYGO, but we continue to see them ignore it in legislation they pass. It appears, given the budget numbers, they also plan to ignore it in the future – wouldn’t you say?
Look at that per household figure from 2008. It was already outrageous and yet within the next 10 years they plan on tripling it to $172,000.
Anyone have any idea of the effect such debt will have on our economy?
For countries with debt-to-GDP ratios “above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more,” according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland.
Hey, when you have the fiscal policy of Greece or Argentina, what do you suppose the end result might be?