The Government Accountability Office has issued a new analysis of the long-term fiscal outlook. Under a scenario with realistic assumptions about revenues and spending, GAO projected that by 2020, debt held by the public as a share of GDP would exceed the 109 percent record set after World War II. Also by 2020, about 92 cents of every dollar of federal revenue would be spent entirely on net interest, Social Security, Medicare and Medicaid.
The report is another warning to policymakers that the recommendations of bipartisan commissions should be seriously considered. The projected numbers are bad, but they will be even worse if Congress does not approve a credible plan for long-term fiscal sustainability.