Paul Gordon Collier- Is the public debt albatross going to be tamed over the coming years? A recent CBO (Congressional Budget Office) report suggests the public debt problem is only set to get much worse, not better, over the coming years.
According to the CBO report, public debt is expected to grow from the current $13 trillion to $21 trillion in 10 years. That figure is expected to balloon to $53 trillion in 25 years. The CBO report took into account the current law regarding public debt accrual.
The growth of public debt threatens the very financial existence of the United States, according to the report. The CBO predicts a fiscal crisis that would force spikes in Interest rates, which would have a profound effect on the markets. The added increases in interest payments to debt would also tax government budgets to the near-breaking point.
CBO projects that public debt would account for 111 percent of the nation’s gross domestic product (GDP) by 2039.