Federal debt will explode over next 10 years, CBO says

The federal debt is set to explode over the next decade even as the budget deficit is projected to reach its lowest level of the Obama presidency, the Congressional Budget Office said Monday.

The annual deficit should total $468 billion for the 2015 fiscal year, which will end Sept. 30, the nonpartisan budget office said. That’s a tad better than the $483 billion in fiscal 2014, and it amounts to about 2.6 percent of the overall economy, the smallest percentage since 2007 and just a hair under the 50-year average.


The improving deficit numbers are temporary, however. Budget deficits are projected to begin going up again in 2018, and to nearly double by 2024 as retiring baby boomers strain the health and retirement systems, the economy grows more slowly and interest on the nation’s outstanding debt rises.


By 2025, the annual budget deficit is forecast to hit 4 percent of the overall economy, much higher than the 2.7 percent historical average.

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WASHINGTON: Federal debt will explode over next 10 years, CBO says | Economy | McClatchy DC

So, it seems that it's only a matter of time before these low deficit numbers disappear.

Personally, I am not hugely worried as as long as our economy can keep up and we can make the minimum payments, we'll be fine.

What the hell did everyone expect with the 'kick the can down the road' approach to fiscal matters?

Mr. Invisible said:

WASHINGTON: Federal debt will explode over next 10 years, CBO says | Economy | McClatchy DC

So, it seems that it's only a matter of time before these low deficit numbers disappear.

Personally, I am not hugely worried as as long as our economy can keep up and we can make the minimum payments, we'll be fine.

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well, as far as the govt servicing the debt... there's no reason they can't.

they would actually have to make the political choice not to.

Mr. Invisible said:

WASHINGTON: Federal debt will explode over next 10 years, CBO says | Economy | McClatchy DC

So, it seems that it's only a matter of time before these low deficit numbers disappear.

Personally, I am not hugely worried as as long as our economy can keep up and we can make the minimum payments, we'll be fine.

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Just don't plan on borrowing any money for the next two presidencies. I have maintained all along that no matter who comes next, they are screwed. Obama is keeping the debt service lower by doing short term bonds which will drive up long term interest rates when it comes time to refinance the debt over the long term. Debt service on just the current debt is going to explode. We will be in Jimmy Carterland by the end of the next President's first, and probably only term.

Mr. Invisible said:

WASHINGTON: Federal debt will explode over next 10 years, CBO says | Economy | McClatchy DC

So, it seems that it's only a matter of time before these low deficit numbers disappear.

Personally, I am not hugely worried as as long as our economy can keep up and we can make the minimum payments, we'll be fine.

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$468 billion dollars is a 'low deficit number' to you? DEFINITELY not to me...I think it is pathetically high.


But that aside. This is all based on record low interest rates. What the heck happens to these CBO figures when/if the Fed raises interest rates back up?

BTW, the Fed is planning to start raising rates later this year (personally - I HIGHLY doubt they will more then a token amount as the economy is still far too weak to do without the government teat of artificially low interest rates).

DA60 said:

$468 billion dollars is a 'low deficit number' to you? DEFINITELY not to me...I think it is pathetically high.


But that aside. This is all based on record low interest rates. What the heck happens to these CBO figures when/if the Fed raises interest rates back up?

BTW, the Fed is planning to start raising rates later this year (personally - I HIGHLY doubt they will more then a token amount as the economy is still far too weak to do without the government teat of artificially low interest rates).

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And that's the big question: What will happen when the government starts to raise interest rates?

Declan said:

...We will be in Jimmy Carterland by the end of the next President's first, and probably only term.

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I agree.

Whoever that person turns out to be, from whatever party, will most likely be hated even more than Obama.

Not only the debt issue, but also it will be highly likely that we will have another recession, as we are already overdue based upon the average length of expansionary times. the longest expansion of our economy, ever, was 120 months, which would fall in the third or fourth year of the next presidency.

That's the only reason that I can think of that Hillary may decide not to run. No one in their right mind would want that legacy.

Mr. Invisible said:

And that's the big question: What will happen when the government starts to raise interest rates?

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Well, they have promised for YEARS that they will raise them - and they never have. Plus, they keep moving the goalposts that dictate when they will raise them. They used to say a 6% U-3 rate would do it. But that has come and gone and still ZIRP (zero interest rate policy) is in place.

They said when ZIRP first began that it would be a few months, maybe a year...and that was over 7 years ago.


As I said, I don't think the Fed dares raise rates because they fear the economy will collapse. And if after seven years of ZIRP and trillions in QE/government stimulus the economy is STILL not healthy enough for it to stand on it's own...then it is clear that they simply have no idea what they are doing.

ZIRP and QE have failed (of course, Keynesians claim that 'it stopped a depression'. Fine prove it. Oh right....they can't. So all they have is unproven fear mongering as defence for this asinine macroeconomic 'rescue plan' that is costing trillions, making the rich MUCH richer while food stamp has risen over 40% and less Americans under 55 are working now then when Obama took office - not that he is entirely to blame, Bush made tons of mistakes as well).

http://www.bls.gov/news.release/empsit.t09.htm

http://www.bls.gov/news.release/archives/empsit_02062009.pdf

imagep said:

I agree.

Whoever that person turns out to be, from whatever party, will most likely be hated even more than Obama.

Not only the debt issue, but also it will be highly likely that we will have another recession, as we are already overdue based upon the average length of expansionary times. the longest expansion of our economy, ever, was 120 months, which would fall in the third or fourth year of the next presidency.

That's the only reason that I can think of that Hillary may decide not to run. No one in their right mind would want that legacy.

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If you are right, that's pretty worrisome as things are already quite bad despite what BS is coming from the White House.

Declan said:

Just don't plan on borrowing any money for the next two presidencies. I have maintained all along that no matter who comes next, they are screwed. Obama is keeping the debt service lower by doing short term bonds which will drive up long term interest rates when it comes time to refinance the debt over the long term. Debt service on just the current debt is going to explode. We will be in Jimmy Carterland by the end of the next President's first, and probably only term.

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So your'e saying things are going to improve ?

imagep said:

I agree.

Whoever that person turns out to be, from whatever party, will most likely be hated even more than Obama.

Not only the debt issue, but also it will be highly likely that we will have another recession, as we are already overdue based upon the average length of expansionary times. the longest expansion of our economy, ever, was 120 months, which would fall in the third or fourth year of the next presidency.

That's the only reason that I can think of that Hillary may decide not to run. No one in their right mind would want that legacy.

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I've been saying for years that Obama's not only screwed up his economy he's screwed up the economy for years to come after he's gone.

Fenton said:

So your'e saying things are going to improve ?

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In China, most definitely; in the US, for some more than most in the middle term