We can’t control what others do and we can’t stop misfortune from striking. But we can control our own actions. Those who are financially prudent will most likely enjoy success, even if events don’t always go their way.
The Congressional Budget Office released its latest Long-Term Budget Outlooktoday, projecting the nation’s finances over the next 30 years. CBO projects that the debt held by the public will hit a new record share of the economy in just four years and grow to 166 percent of Gross Domestic Product (GDP) by 2054. CBO also projects that the Social Security Old-Age and Survivors Insurance trust fund will be exhausted in 2033, the Medicare Hospital Insurance trust fund in 2035, and the Highway Trust Fund in 2028.
You can read more about the report in our summary here, and we will publish further analysis later today.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
This is yet another reminder that politicians put political priorities ahead of the long-term health of the country. There is no way to look at these eye-popping numbers without realizing we need to make a change. And yet we have lawmakers promising what they won’t do: I won’t raise taxes, I won’t fix Social Security, I won’t pay for all the things I do want to do. And so we continue on this dangerous path.
Despite some recent progress with the Fiscal Responsibility Act, our debt remains on an unsustainable trajectory. Even under current law, CBO projects debt will double as a share of the economy relative to pre-pandemic levels. And major trust funds supporting Social Security, highways, and Medicare face looming insolvency.
So far, the presidential campaign is not offering any hope – candidates need to be asked how they would fix Social Security, fix Medicare, and bring the debt back to manageable levels. Voters should not be satisfied without specific answers.
The scariest part of our grim fiscal outlook is rising interest costs. Those costs have already doubled as a share of the economy since 2015, and this year CBO believes interest will cost more than defense spending or Medicare. By 2053, interest costs will double again after becoming the single largest line item in the entire federal budget in 2051. This year, we will spend $870 billion on interest – more than all the federal dollars we spend on children – and that number will only grow from here.
For years, we’ve heard that our fiscal problems could be dealt with in the future before they get out of hand. Well, the future is now. Under the next presidential term, debt will hit a record share of the economy, interest costs will surge, and major trust funds will approach insolvency.
Pledges not to touch Social Security and Medicare are incredibly counterproductive, given CBO’s projections that those two programs will grow by 2.9 percent of GDP over the next three decades under CBO’s baseline and face looming insolvency under the law.
And talk of extending tax cuts or introducing new tax breaks and spending programs show that many politicians have their priorities backwards. We can’t even afford the spending we already have, for gosh sakes.
If this report isn’t an alarm bell, it’s hard to think of what would be. Washington needs to act soon to put the national debt on a sustainable path.
Todzy Republicans just blocked the proposed bipartisan commission for reducing debt. But hey, they did propose to ban IVF treatment nationwide, and take away health insurance from tens of millions by killing Obamacare. That is something, right? I am sure it will work out.
Does anyone have a link to the CBO’s Long Term Budget Outlook from 1994? I would like to see how “close” they came to their previous forecast. Could not find it on the CBO site, the oldest is year 2000.
Since Biden is so good at cancelling student debt, wht don’t he just cancel all the outstanding debt and we can then start over. And Mr James2 – you insulted banana republics!
And yet as soon as Trump evens utters the words “social security”, Richard is the first one to spread the false, vitriolic propaganda that he wants to slash social security and medicare. If we can’t talk about it, Richard, how are we going to fix the problem?
I never said anything about Trump and SS that he didn’t say. Now he says he won’t touch it but has no stated plan on how to make it sustainable. There are only two was to fix it, raise taxes or adjust future benefits in some way or a combination, but there are several ways to do either without painful consequences.
I never said you “said” anything about Trump. What you did was spread false talking points from liberals like Nancy Altman, who by the way, has been one of the leading opponents of ANY fixes to social security for at least the past 20 years.
And you think this is news? The deficits have run every year for years, not just recently, although they began in earnest under George W. The zero interest rate helped cover them for years. That policy made the public who had savings accounts look like fools. The Dems say look at Trump tax cuts, he let the rich off the hook. Go back and look at percentage of GDP for tax collections and percentage for federal spending. Somehow, spending must go up they all say, Dems and Republicans alike. They then propose just cutting a few percentage points off an increase in spending. It is not the same as cutting spending. I do question when does all this growth in the GDP occur as a result of the millions of newcomers (Bidens’ term) taking up jobs and paying taxes. I just have questions, I’m not in a position to affect policy. I do hate to see what has happened to what I was once taught was a great country but now is a banana republic. Carry on.
Who would give any credence to a 30-year projection?
Most of CBO’s 10-year projections turn out to be wrong. Who predicted covid and the effect on the economy? Who predicted the collapse in 2007-2009 that wrecked the housing market and drove unemployment to 10%? What about 9/11 and its effect on the economy?
All we really know is about 45% of our citizens pay no federal income tax– folks want more goodies and always want someone else to pay–that lefties want bigger and bigger government while on the right a growing but smaller footprint.
The politicians are simply reflecting what people want or will tolerate. Don’t like the trajectory then vote them out and that means your person!
“…45% of our citizens pay no federal income tax– folks want more goodies and always want someone else to pay–”
And half of those pay negative tax, what with tax credits, transfers, and entitlements. Make them pay! Take all that wealth they’re squirrelling away and share with the rest of us.
They are that black line at the bottom. The one that keeps getting skinnier.
When the right wants a smaller footprint, that’s where they want to take it from. Envy is not pretty.
Tell me, how many people on the bottom stay on the bottom? Did your family start out, like mine, as low wage earners but worked their way up? Now if you have super large % of folks having babies without a husband then there is an obstacle.
Get an education! 2. Get a job! 3. Get married and stay married. This ain’t rocket science!
8 million illegals have come here in 3 years–I guess it’s our fault if they are currently impoverished–maybe in 10-15 years they won’t be.
“Holdings of Family Wealth 1989 to 2013. The top 10% of families held 76% of the wealth in 2013, while the bottom 50% of families held 1%. Inequality increased from 1989 to 2013.”
The bottom line… 50% of families held 1% of total wealth. One percent and falling.
So tell me what qualifies as wealth? Does my house–what about my second house in Avalon, NJ–my retirement assets–shares in the funds we have been buying since marriage in 1968? Old books that have value–the two antique cars I have? Clue me in?
Why would anyone care what I, or anyone else, has acquired other than they want to appeal to folks on a very base level. As brother Quinn tells us the pie has not shrunk–folks need to get off their butt and get a job–marry and stay married–teach your kids some responsibility–and acquire assets. Millions have done it and millions more will unless the loons completely take over.
QUINNSCOMMENTARY 
Todzy Republicans just blocked the proposed bipartisan commission for reducing debt. But hey, they did propose to ban IVF treatment nationwide, and take away health insurance from tens of millions by killing Obamacare. That is something, right? I am sure it will work out.
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Does anyone have a link to the CBO’s Long Term Budget Outlook from 1994? I would like to see how “close” they came to their previous forecast. Could not find it on the CBO site, the oldest is year 2000.
LikeLike
Since Biden is so good at cancelling student debt, wht don’t he just cancel all the outstanding debt and we can then start over. And Mr James2 – you insulted banana republics!
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And yet as soon as Trump evens utters the words “social security”, Richard is the first one to spread the false, vitriolic propaganda that he wants to slash social security and medicare. If we can’t talk about it, Richard, how are we going to fix the problem?
LikeLike
I never said anything about Trump and SS that he didn’t say. Now he says he won’t touch it but has no stated plan on how to make it sustainable. There are only two was to fix it, raise taxes or adjust future benefits in some way or a combination, but there are several ways to do either without painful consequences.
LikeLike
I never said you “said” anything about Trump. What you did was spread false talking points from liberals like Nancy Altman, who by the way, has been one of the leading opponents of ANY fixes to social security for at least the past 20 years.
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What I used were her quotes and comments. She and her group are out of touch with reality, that’s doesn’t mean we should not listen to both sides.
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And you think this is news? The deficits have run every year for years, not just recently, although they began in earnest under George W. The zero interest rate helped cover them for years. That policy made the public who had savings accounts look like fools.
The Dems say look at Trump tax cuts, he let the rich off the hook. Go back and look at percentage of GDP for tax collections and percentage for federal spending. Somehow, spending must go up they all say, Dems and Republicans alike. They then propose just cutting a few percentage points off an increase in spending. It is not the same as cutting spending.
I do question when does all this growth in the GDP occur as a result of the millions of newcomers (Bidens’ term) taking up jobs and paying taxes.
I just have questions, I’m not in a position to affect policy. I do hate to see what has happened to what I was once taught was a great country but now is a banana republic. Carry on.
LikeLike
Who would give any credence to a 30-year projection?
Most of CBO’s 10-year projections turn out to be wrong. Who predicted covid and the effect on the economy? Who predicted the collapse in 2007-2009 that wrecked the housing market and drove unemployment to 10%? What about 9/11 and its effect on the economy?
All we really know is about 45% of our citizens pay no federal income tax– folks want more goodies and always want someone else to pay–that lefties want bigger and bigger government while on the right a growing but smaller footprint.
The politicians are simply reflecting what people want or will tolerate. Don’t like the trajectory then vote them out and that means your person!
LikeLike
You speak the truth
LikeLike
“…45% of our citizens pay no federal income tax– folks want more goodies and always want someone else to pay–”
And half of those pay negative tax, what with tax credits, transfers, and entitlements. Make them pay! Take all that wealth they’re squirrelling away and share with the rest of us.
They are that black line at the bottom. The one that keeps getting skinnier.
When the right wants a smaller footprint, that’s where they want to take it from. Envy is not pretty.
LikeLike
Tell me, how many people on the bottom stay on the bottom? Did your family start out, like mine, as low wage earners but worked their way up? Now if you have super large % of folks having babies without a husband then there is an obstacle.
8 million illegals have come here in 3 years–I guess it’s our fault if they are currently impoverished–maybe in 10-15 years they won’t be.
LikeLike
The graph was more impressive. C’est la vie.
“Holdings of Family Wealth 1989 to 2013. The top 10% of families held 76% of the wealth in 2013, while the bottom 50% of families held 1%. Inequality increased from 1989 to 2013.”
The bottom line… 50% of families held 1% of total wealth. One percent and falling.
LikeLike
But the pie hasn’t shrunk
LikeLike
So tell me what qualifies as wealth? Does my house–what about my second house in Avalon, NJ–my retirement assets–shares in the funds we have been buying since marriage in 1968? Old books that have value–the two antique cars I have? Clue me in?
Why would anyone care what I, or anyone else, has acquired other than they want to appeal to folks on a very base level. As brother Quinn tells us the pie has not shrunk–folks need to get off their butt and get a job–marry and stay married–teach your kids some responsibility–and acquire assets. Millions have done it and millions more will unless the loons completely take over.
LikeLike