E According To The CBO, The US Govt. Is On A Long-Term Trajectory Of Red Ink

“Under current law, CBO projects deficits will grow from $779 billion last year to $897 billion in 2019, $1.1 trillion in 2022, and $1.4 trillion by 2029. As a share of the economy, CBO projects deficits will increase from a prior-decade low of 2.4 percent of GDP back in 2015 to an average of 4.4 percent over the next decade. These projected deficits are significantly higher than what most experts view as sustainable, but sadly deficits would be even higher if current policies are continued.” (Committee For A Responsible Federal Budget, Analysis of CBO’s Jan. 2019 Budget And Economic Outlook, Jan. 29, 2019)

The non-partisan Congressional Budget Office (CBO) provides regular updates to its Budget and Economic Outlook. The projections are presented on two different scenarios, both assuming there will not be a recession within the 1- year time span.

The baseline projection assumes that current governing spending plans and taxes remain unchanged. As for the economic assumptions, the CBO projects that the U.S. economy will continue to enjoy solid, albeit moderating, real GDP growth in the near-term, followed by persistent growth of below 2% per year. The CBO’s baseline 10-year outlook is similar to forecasts used by the Federal Reserve.

Under the baseline scenario, the CBO projects the budget deficit will increase from 3.8% in 2018 to a high of 4.7% of GDP by 2022.

Under a far worse alternative fiscal scenario. which also assumes no recession, the budget deficit would increase to nearly 7% of GDP by 2029.

The CBO Baseline Projections



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