U.S. debt is on track to be nearly twice the size of the U.S. economy by 2037, the nonpartisan Congressional Budget Office (CBO) warned Tuesday.
The new CBO report states that increased entitlement spending driven by the retirement of the baby boomers and insufficient revenue is making the long-term outlook for the national debt increasingly dire.
Under CBO’s most likely scenario, in which lawmakers extend current tax rates and fail to curb entitlement spending, debt held by the public would reach 109 percent of the economy by 2026, and it would be almost 200 percent of GDP by 2037.
Many economists have warned that if debt held by the public approaches 100 percent of GDP, it can bring on the kind of fiscal crisis being felt in European countries today, in which governments must suddenly slash spending and laying off workers in the face of rising interest rates caused by spooked investors.
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