According to the long-term budget forecast released by the U.S. Congressional Budget Office (CBO) on February 16 local time, the debt burden of the United States in 30 years will be twice its annual economic output.
By 2051, the U.S. public debt accounted for 202% of gross domestic product (GDP), almost twice the current level.
The debt level of the United States exceeded 100% of GDP for the first time last year since World War II, and the future debt level of the United States is expected to break its historical record.
According to the CBO’s forecast, due to the COVID-19 epidemic, the fiscal deficit of the United States is expected to account for 10.3% of GDP this year, and the fiscal deficit will fall to an average of 4.4% by 2031.
However, the CBO also predicts that in the next 10 years after 2031, the fiscal deficit of the United States will rise back to 7.9% and soar to 11.5% of GDP between 2042 and 2051.
During this period, U.S. revenue increased only slightly, while spending on major medical programs, social security and interest increased significantly, and interest costs alone are expected to account for a large proportion of debt. In the last decade of the 30-year budget window, the cost of interest will rise from 1.4% to 7% of GDP.
This figure is more than the annual expenditure on social security, or non-mandatory defense and domestic federal projects combined.
Maya MacGuineas, chairman of the Committee for a Responsible Federal Budget, said that the long-term economic outlook of the United States is “dangerous”.
McGinhath said: “We should not avoid borrowing the funds needed to end the COVID-19 epidemic to support the economic recovery and help families and businesses survive this crisis.
But along the way, we can’t ignore the long-term prospects.” It is reported that the two parties have been debating whether the spending of the $1.9 trillion coronavirus relief package pushed by the Democratic Party is too large. McGinhas said that without a long-term solution, debt may stifle future economic growth.
“Ignoring this long-term debt situation will damage economic growth, lower incomes, and make it harder for us to address backlogs like income inequality, support for households, and improvements to necessary infrastructure,” said McGinhas.