Monday, February 10, 2014

This is why the CBO’s deficit report is bad news

This is why the CBO’s deficit report is bad news

In fiscal years 2014-2015, the deficit does indeed fall; it’s expected to drop another $36 billion next year. In 2016, though, things change: from then on, the deficit skyrockets, growing by an average of $66 billion a year.

Over the next ten years, just the interest on the debt will grow to 1.3% of GDP, nearly quadrupling.

The reason? While federal revenues are expected to grow in sync with GDP, spending growth is projected to far outpace GDP growth.