All these figures would be all-time highs (except for deficits during World War II and in the first two years of the COVID-19 pandemic) and would continue to grow after 2053.īudget outcomes would be even worse under “current-policy” projections that incorporate more realistic policy choices than those required by the baseline calculations. By 2053, relative to GDP, annual net interest payments exceed 7%, the unified deficit exceeds 11%, and the public debt stands at 195%. The average nominal interest rate on government debt rises to exceed the nominal economic growth rate by 2046, setting off the possibility of explosive debt dynamics. Primary deficits rise further as spending on Social Security and health-related programs continue to grow faster than GDP and revenue growth remains anemic. Over the following two decades, the projected trends are even less auspicious. Debt will rise from 98% of GDP currently to 118% by 2033, another all-time high. The unified deficit, and even the cyclically adjusted deficit, will exceed 7% of GDP at the end of decade.

Net interest payments will rise from 2.4% of GDP currently to 3.6% in 2033, an all-time high. Under current law for the next 10 years, the CBO’s projections imply that persistent primary deficits will average 3.0% of GDP. Unified deficits and public debt rise accordingly. Net interest payments also rise substantially relative to GDP due to high pre-existing debt, rising primary deficits, and gradually increasing interest rates.

Low revenues coupled with rising outlays on health-related programs and Social Security drive permanent, rising primary deficits as a share of the economy.

Outlook drive