US deficit soaring out of control will be a disaster in the world

The Congressional Budget Office (CBO) of the United States just released its February 2024 Budget and Economic Outlook, the (CBO) projected that the debt held by the public – a key metric for tracking the size of the national debt used by economists – totaled $26.2 trillion in 2023 and is set to rise to $27.9 trillion in 2024. Over the next decade, it is projected to rise to $48.3 trillion in 2034.

The Federal Budget

The deficit totals $1.6 trillion in fiscal year 2024, grows to $1.8 trillion in 2025, and then returns to $1.6 trillion by 2027. Thereafter, deficits steadily mount, reaching $2.6 trillion in 2034. Measured in relation to gross domestic product (GDP), the deficit amounts to 5.6 percent in 2024, grows to 6.1 percent in 2025, and then shrinks to 5.2 percent in 2027 and 2028. After 2028, deficits climb as a percentage of GDP, returning to 6.1 percent in 2034. Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007–2009 financial crisis, and the corona­virus pandemic.

Debt held by the public increases from 99 percent of GDP at the end of 2024 to 116 percent of GDP—the highest level ever recorded—by the end of 2034. After 2034, debt would continue to grow if current laws generally remained unchanged.

Outlays in 2024 amount to 23.1 percent of GDP and stay close to that level through 2028. After 2028, growth in spending on programs for elderly people and rising net interest costs drive up outlays, which reach 24.1 percent of GDP by 2034.

Revenues amount to 17.5 percent of GDP in 2024, decline to 17.1 percent in 2025, and then climb to 17.9 percent of GDP by 2027 after certain provisions of the 2017 tax act expire. Revenues remain near that level through 2034.

The Economy

The state of the U.S. economy in coming decades will affect the federal government’s budget deficits and debt. Key components of CBO’s long-term economic forecast are its projections of real potential GDP—the maximum sustainable output of the economy, adjusted to remove the effects of inflation—and interest rates.

That slower growth is explained by slower growth in the potential labor force and in potential labor force productivity.

Real potential GDP grows more slowly throughout the 2023–2053 period than it has, on average, over the past 30 years. That slower growth is explained by slower growth in the potential labor force and in potential labor force productivity.

2023 interest costs reach $659 billion, about 10% of total outlays, projected to 23% on 2053.
Interest payments on the nation's debt are expected to hit $1.4 trillion by fiscal year 2033 and $5.4 trillion by fiscal year 2053.

According to the CBO’s latest estimates, in 2024 the U.S. government will pass a grim and once-unimaginable milestone. The federal debt has gotten so large that spending on interest to service that debt now exceeds federal spending on national defense.

Maya MacGuineas is the president of the bipartisan Committee for a Responsible Federal Budget: "National debt is the greatest threat to our country; it's time for Congress to act."

Senator Mitt Romney from Utah state: "These projections are harrowing. The fact that we are expected to spend more on interest on the debt than on our national defense this year should scare us all—we are playing with fire by not taking immediate action to stabilize the debt."

根据无党派的国会预算办公室(CBO)周三发布的一项新预测，联邦政府创纪录的国家债务规模将会变得更大，到2034年将达到54万亿元。

今年1月，美国国债首次超过34万亿元。

国会预算办公室指出，人口老龄化和联邦健保成本上升是未来10年国债飙升的主要原因。

更高的利率也对政府支出产生了重大影响。更高的利率已经影响到消费者的财务状况，导致抵押贷款、汽车贷款和信用卡利率上升。

从明年开始，利息成本与整体经济的比率将达到1940年以来的最高水平。

国会预算办公室表示，预计联储将在今年年中开始降低利率。

好消息是，国会预算办公室表示，在去年债务上限闹剧之后颁布的法案将使预算赤字低于此前的预期。预算赤字指的是联邦政府收入(主要通过税收)与支出之间的差额。

国会预算办公室还表示，预算赤字低于预期主要由于经济和就业市场强劲。该机构还特意提及了去年进入劳动力市场的520万员工，其中许多是移民。

尽管如此，今年的预算赤字仍将增长到1.6万亿元，未来10年预计将增长到2.6万亿元。