CBO report: U.S. debt will be 2x GDP by 2037

Le sigh. Yet another study pointing to imminent fiscal calamity, while Obama & friends busy themselves trying to convince everyone that the Obama administration hasn’t actually increased spending all that much, or something. Instead of — oh, I don’t know — maybe actually doing something about it.

The new CBO report warns that increased entitlement spending driven by the retirement of the baby boomers and insufficient revenue is making the long-term outlook for the national debt increasingly dire.
Under CBO’s most likely scenario, in which lawmakers extend current tax rates and fail to curb entitlement spending, debt held by the public would reach 109 percent of the economy by 2026, and it would be almost 200 percent of GDP by 2037.
Many economists have warned that if debt held by the public approaches 100 percent of GDP, it can bring on the kind of fiscal crisis being felt in European countries today, in which governments must suddenly slash spending and lay off workers in the face of rising interest rates caused by spooked investors.
CBO’s latest prediction is roughly similar to its 2011 report, despite the $2.1 trillion in budget cuts enacted in last August’s debt-ceiling deal between the White House and Congress.

I take pretty much all government ‘estimates’ with a grain of salt — and by that, I mean that I’d usually wager the real situation is worse than the government projects it to be. The CBO report hints that current policies, especially including, ahem, the Bush tax cuts, are what’s bankrupting us, and that getting rid of said tax cuts would be a big help in bringing down the deficit — a point Democrats will assuredly use in arguing for their “balanced approach.”

Read more: http://hotair.com/archives/2012/06/05/cbo-report-u-s-debt-will-be-2x-gdp-by-2037/