No matter what your opinion you have on government spending, it has to be scary that the amount we pay on debt service is growing and risks overtaking the amount we spend on things we (allegedly) want. Or what we (allegedly) need since it’s a similar story when compared with Mandatory spending. The CBO expects both Mandatory and Discretionary spending to remain relatively stable, but that debt service will grow from just over 1% of GDP to over 3% by 2020.
Net interest payments will take up a disproportionate amount of the budget. Spending money on debt service is ultimately a waste and will severely limit what the government can do in the future as debt service swamps almost all other line items.
The CBO numbers are disturbing enough, but they are too optimistic!
The CBO makes it clear how we get there, and what scares me even more, is that their assumptions seem optimistic.
Here are the current Congressional Budget Office projections for the deficit:
Year 2009A 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Annual Deficit -1,413 -1,342 -1,066 -655 -525 -438 -507 -585 -579 -562 -634 -685
So the CBO has the annual deficit gradually declining until 2014 and then rising steadily until 2020.
This is based on multiple assumptions, but at least a few stand out as optimistic, if not outright fantasy.
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