Scary Budget Numbers: Why the Truth is Even Worse

CBO is required to use current law as the basis for its estimates—to assume, for example, that all the Bush tax cuts will expire at the end of 2012, that Medicare payments to physicians will be cut sharply, and that the alternative minimum tax will be allowed to affect millions more Americans. Using these assumptions, taxes as a share of GDP would be allowed to increase by five percentage points by 2014 and would keep on rising thereafter, we’d have a cumulative deficit of about $7 trillion dollars over the next decade, and debt held by the public would increase from 62 percent to 77 percent of GDP. Using more politically realistic assumptions, the cumulative deficit would be about $12 trillion, and debt held by the public would reach 97 percent of GDP, the highest level since 1946 (when it was headed down, not up).

Full article on the latest budget numbers.

Comments (4)

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  1. Devon Herrick says:

    Another reason the budget numbers are understated has to do with accounting for elderly entitlements. The Social Security and Medicare Trust Funds represent claims on future taxpayers — not assets that offset future obligations.

  2. Neil H. says:

    I agree that the truth is even worse.

  3. Ken says:

    I think it’s even worse than the “worse” all of you are thinking about.

  4. Bruce says:

    Are you asking us if government is going to get more expensive? Are you kidding?