The latest official numbers, including the budget and economic forecast for the next decade from the nonpartisan Congressional Budget Office (CBO), show national debt rising well past historical norms and warns of serious consequences. Here are the key figures and what they mean.
Budget Deficits Will Rise Substantially Over the Next Decade
- The fiscal year 2017 budget deficit was $666 billion, $80 billion higher than last year. And deficits are projected to rise every year after 2018.
- Trillion-dollar deficits will return by 2022, and the deficit will be nearly $1.5 trillion in 2027. Tweet
- Deficits will rise substantially in the next decade from a little more than 3 percent of the economy in 2016 to just over 5 percent by 2027. Tweet
National Debt Will Continue to Grow Towards Record Levels
- Debt held by the public, which excludes what the federal government owes itself, will grow by $10 trillion over the next decade, reaching $26 trillion in 2027. Tweet
- As a share of the economy, debt will grow from 77 percent today to 91 percent in 2027. That is more than twice the 50-year debt average of 40 percent. Tweet
- The growth in the debt going forward will be largely driven by rising health costs and an aging population.
- Interest on the debt will be the fastest growing part of the federal budget, roughly tripling in dollar terms and doubling as a share of the economy.
The Consequences of Rising Debt Are High
- CBO warns that “high and rising debt would have serious negative consequences for the budget and the nation.”
- This will include lower wages, reduced flexibility to respond to unexpected challenges like a recession, and increased likelihood of a fiscal crisis.