Since the Great Depression, that level has been exceeded only during and shortly after World War II and during the 2007–2009 financial crisis and the coronavirus pandemic.
That growth would result from rising interest costs and large and sustained primary deficits, which exclude net outlays for interest CBO said in a release.
The US federal budget deficit will significantly rise in relation to GDP over the next 30 years, reaching 8.5 per cent of the GDP in 2054, according to the Congressional Budget Office.
Those deficits will average 2.2 per cent of the GDP over the next 30 years.
Federal debt held by the public, measured as a percentage of GDP, will rise to 107 per cent by 2029.
Those deficits will average 2.2 per cent of the GDP over the 30-year period; over the past 50 years, they averaged 1.6 per cent of the GDP.
Federal debt held by the public, measured as a percentage of GDP, will rise in every year of the 2024-2054 period. By 2029, that debt will climb to 107 per cent of the GDP, exceeding the historical peak it reached immediately after World War II. In 2054, it will reach 166 per cent of the GDP and will stay on track to increase thereafter.
Such large and growing debt would slow economic growth, push up interest payments to foreign holders of US debt and pose significant risks to the fiscal and economic outlook, CBO noted. It could also cause lawmakers to feel more constrained in their policy choices.
Measured as a percentage of GDP, federal outlays will increase each year beginning in 2028, reaching 27.3 per cent of the GDP in 2054, CBO projected.
Revenues, also measured as a percentage of GDP, will fluctuate over the next decade and will rise thereafter, reaching 18.8 per cent of the GDP in 2054.
That later growth in revenues will occur mainly because growth in income boosts receipts from the individual income tax.
Fibre2Fashion News Desk (DS)
