With the ink barely dry on a $858 billion tax cut and spending bill, Concord Coalition Executive Director Robert L. Bixby says, Washington has been hit with an official reminder that steps to rein in the nation’s debt cannot be postponed much longer.
In a blog post today, he reviews the troubling 2010 Financial Report of the U.S. Government that was recently released by the Treasury Department. The report projects that under current policies “the debt-to-GDP ratio will continually increase over the next 75 years and beyond, which means current policies are not sustainable.”
The longer we wait to deal with the problem, the larger the revenue increases and spending cuts would need to be to put the budget on a sustainable path. Persistent deficits would cause the debt to steadily rise from 62 percent of GDP in 2010 to 130 percent in 2040.
“More alarming,” Bixby writes, “is that the projections used in the Financial Report are far from a worst-case scenario." The GAO declined to give an opinion on some of the government’s financial statements, citing “material weaknesses in internal control over financial reporting and other limitations.”