The latest official numbers, including the budget and economic forecast for the next decade from the non-partisan Congressional Budget Office (CBO), show national debt on the rise. Here are the figures that you and policymakers need to know and what they mean.
Budget Deficits Will Rise Substantially Over the Next Decade
- The fiscal year 2016 budget deficit was $587 billion, more than one-third higher than the previous year. And deficits are projected to rise every year after 2018. Tweet
- Trillion-dollar deficits will return by 2023, and the deficit will reach $1.4 trillion by 2027. Tweet
- Deficits will rise substantially in the next decade from 3 percent of the economy this year to 5 percent by 2027.
National Debt Will Continue to Grow Towards Record Levels
- Debt held by the public will grow by $10 trillion over the next decade, from $15 trillion at the end of 2017 to $25 trillion in 2027. Tweet
- As a share of the economy, debt will grow from 77 percent today to 89 percent in 2027. That is more than twice the 50-year debt average of less than 40 percent. Tweet
- Debt held by the public will exceed its all-time high of 106 percent of the economy by 2035 and total 145 percent by 2047. Tweet
- The growth in the long-term debt will be largely driven by rising health costs and an aging population. Almost two-thirds of the projected $2.6 trillion increase in the budget between 2017 and 2027 is for Social Security and health care.
- Interest on the debt will be the fastest growing part of the federal budget, nearly tripling in dollar terms and almost doubling as a share of the economy.
The Consequences 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 responded to unexpected challenges like a recession, and increased likelihood of a fiscal crisis.