The Congressional Budget Office’s newest projects underscore the nation’s unsustainable spending plans as Republicans look to extend President Donald Trump’s 2017 tax cuts.
The CBO said U.S. debt held by the public is on track to reach its highest level ever in 2029 before reaching 156% of gross domestic product in 2055. Gross domestic product is a measurement of economic output.
“Mounting debt would slow economic growth, push up interest payments to foreign holders of U.S. debt, and pose significant risks to the fiscal and economic outlook; it could also cause lawmakers to feel constrained in their policy choices,” the CBO report noted.
Economists have debated when debt-to-GDP becomes problematic for nations, and the CBO report notes the lack of consensus.
“CBO cannot reliably quantify the probability of a fiscal crisis. In the agency’s assessment, no tipping point can be identified at which the debt-to-GDP ratio would become so high that it would make a crisis likely or imminent, nor is there a specific tipping point beyond which interest costs would become so high in relation to GDP that they were unsustainable,” according to the report. […]
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