As political candidates offer vague promises of spending restraint and Congress considers the administration’s new budget, Americans face an unpleasant fiscal landmark: before we get to the election in November, the national debt will exceed the U.S. economy’s entire annual production.
The debt has not exceeded the Gross Domestic Product (GDP) since World War II. Once that war was over, however, the debt stabilized and then steadily fell as a percentage of the economy.
Unfortunately, nothing like that is on the horizon today. On the contrary, government projections show the federal debt – which recently topped $15.5 trillion -- continuing to increase rapidly in the years ahead as we continue to borrow and as today’s unusually low interest rates eventually rise toward their historic average.
The Concord Coalition’s projections, based on reasonable assumptions about future decisions by elected officials, show federal debt snowballing even more rapidly than government projections do. And if the economy falters, the debt would grow even faster.
Even sweeping fiscal reform plans, such as those recommended a year ago by President Obama’s bipartisan fiscal commission, envision the federal debt continuing to rise for decades.
A few facts about the federal debt to keep in mind:
+ It consists...