![]() High and rising federal debt makes the economy more vulnerable to rising interest rates and, depending on how that debt is financed, rising inflation. The projected budget deficits would boost federal debt to 104 percent of GDP in 2021, to 107 percent of GDP (the highest amount in the nation’s history) in 2023, and to 195 percent of GDP by 2050. By the end of 2020, federal debt held by the public is projected to equal 98 percent of GDP. In CBO’s projections, deficits increase from 5 percent of gross domestic product (GDP) in 2030 to 13 percent by 2050-larger in every year than the average deficit of 3 percent of GDP over the past 50 years. Even after the effects of the 2020 coronavirus pandemic fade, deficits in coming decades are projected to be large by historical standards. CBO’s 20 Extended Baseline Projections of Outlays and RevenuesĮach year, the Congressional Budget Office publishes a report presenting its projections of what federal deficits, debt, spending, and revenues would be for the next 30 years if current laws governing taxes and spending generally did not change. CBO’s 20 Extended Baseline Projections of Deficits and Federal Debt Held by the Public CBO’s 20 Projections of the Interest Rate on 10-Year Treasury Notes Demographic Factors That Contribute to Population Growth Federal Debt if Total Factor Productivity Growth or Interest Rates Differed From the Values Underlying CBO’s Projections Shares of Income Taxed at Different Rates Under the Individual Income Tax System Spending for Social Security and the Major Health Care Programs in 20 Federal Outlays for the Major Health Care Programs, by Category Average Annual Growth of Real Potential GDP How Timing Affects the Size of Policy Changes Needed to Make Federal Debt Meet Two Possible Goals in 2050 Total Deficits, Primary Deficits, and Net Interest CBO’s Projections of Outlays and Revenues The Federal Budget, on Average, 2010 to 20 to 2050 Federal Debt Held by the Public, 1900 to 2050 Average Annual Values for Economic Variables That Underlie CBO’s Extended Baseline Projections Average Annual Values for Demographic Variables That Underlie CBO’s Extended Baseline Projections Effective Marginal Federal Tax Rates Underlying CBO’s Extended Baseline Projections Summary Financial Measures for the Social Security System Assumptions About Outlays and Revenues Underlying CBO’s Extended Baseline Projections The Size of Policy Changes Needed to Make Federal Debt Meet Two Possible Goals in 2050 Key Projections in CBO’s Extended Baseline Changes in Long-Term Budget Projections Since January 2020.Changes in Social Security’s Projected Finances.Appendix B: Changes in CBO’s Long-Term Budget Projections Since June 2019. ![]()
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