The nonpartisan Congressional Budget Office (CBO) has released its 2018 “Long-Term Budget Outlook.” Unfortunately for all Americans, it’s even worse than many expected. The 2018 “Outlook” is the first forecast to take into account the tax cuts and spending increases Congress enacted in 2017. Assuming the recent tax cuts and spending increases are maintained over the forecasted period, CBO estimates the amount of debt held by the public will equate to the national income over the next decade. Even more ominous, CBO predicts the national debt will eventually be more than double the national income, in just 30 years.
This debt level would be unprecedented, exceeding heights reached during the Great Depression and World War II. It should come as no great revelation that CBO concludes this is not sustainable. Unless the United States implements fiscal austerity, reduced economic growth and a debt crisis are inevitable.
Just as they always do, Washington, D.C. elites responded to this nightmarish CBO forecast with a collective yawn. The question is why politicians and policymakers are in denial, despite the growing evidence of a fast-approaching debt disaster.