The dangers of ignoring unsustainable financial trajectory

The Congressional Budget Office (CBO) released a budget outlook showing unsustainable financial trajectory pertaining to growing entitlements and debt payments, squeezing national defense. The U.S. debt is expected to grow to $48.3 trillion by 2034 from $26.2 trillion last fiscal year, resulting in debt as a share of GDP rising to 116% in 2034 from 97.3%. Revenues are expected to average 17.8% of GDP through 2034, with spending averaging 23.5% over the next decade. The report assumes no recession and that Congress doesn't enact additional spending, with debt growing faster than projected as Congress ignores the situation. This trajectory is unsustainable, and even these projections may be optimistic, considering the CBO's history of underestimating spending. Growing deficits will compound the problem, increasing interest payments while national defense spending is at a postwar low of 3% of GDP, heading lower. The CBO report interrupts the presidential campaign, emphasizing the crucial issue of addressing the country's financial trajectory.

Read more