Nation's Debt Continues to Grow
June 23, 2011
The Congressional Budget Office (CBO) reported Wednesday that the nation probably will owe outside creditors more than the size of the entire economy in 10 years, says USA Today.
- Public debt will be equal to 101 percent of the economy in 2021, rising to 187 percent by 2035 unless dramatic changes are made, according to the report.
- By comparison, last year's long-term budget outlook from CBO forecast a public debt equal to 87 percent of the economy by 2020.
- The difference -- 14 percent -- would be about $2 trillion based on today's economy, even more as it grows.
The problem outlined in the report: spending that far outpaces revenue as the years pass. Here's a simplified version:
- Spending is projected to grow from 24 percent of the economy today to 26 percent in 2021 and 34 percent in 2035.
- Revenue is projected to grow from 15 percent today to 19 percent in 2021, where it would remain in 2035.
- Annual deficits would be 7.5 percent of the economy in 2021, less than today's 9.3 percent; but each year's deficit adds to the national debt.
- By 2035, the deficit would be 15.5 percent of the economy, and the accumulated debt would be 187 percent.
Source: Richard Wolf, "Obama, Congress Warned: National Debt Growing Faster," USA Today, June 22, 2011.
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