WASHINGTON DC – The US Congressional Budget Office (CBO) predicts that US federal debt will continue to rise dramatically over the next 30 years, reaching 144% of GDP by 2049.
According to CBO experts, public debt rise from 78 percent of GDP forecast at the end of 2019 (the highest since World War II) to 92 percent in 2029 and 144 percent in 2049.
“The level of indebtedness would be the highest in history and would tend to grow even more,” said the CBO, quoted by CNN .
The country’s public debt has surpassed $22 trillion. Debt is projected to continue to grow by a trillion dollars annually over the next decade due to the payment of pensions and the health care expenses of the baby boomer generation.
Challenge for financial authorities
CBO director Phillip Swagel claimed that the prospect of such a large deficit for many years and the rising and high debt would result would pose substantial risks to the nation and significant challenges for policy makers.
To put these numbers in perspective, on the eve of the 2008 crisis , US public debt was 35% of GDP, less than half of what it is today.
Notice to legislators
The financier Michael Peterson, for his part, stressed that CBO’s long-term forecasts show that the deficit will continue to grow in the future, with no end in sight.
He added that these supposed clear projections should encourage legislators to start managing debt immediately and budget responsibly to help the United States meet its most pressing challenges,
In March 2018, the US Federal Reserve (Fed) administration estimated that all sectors’ indebtedness, including bonds, loans and intergovernmental bonds, exceeded $72 trillion.
This huge amount divided by the number of US inhabitants (329 million, according to the national census), would amount to almost $220 thousand per person.
The US Treasury, the federal states, and the financial sector have been borrowing at a dizzying pace over the last 40 years, with special emphasis around 2008 when the global financial crisis began.
Gross debt rose from $5 trillion at the beginning of Ronald Reagan’s presidency to $29 trillion when George W. Bush took office. Meanwhile, during the crisis, the value almost doubled to $54 trillion, and since then increased by $18 trillion.
The Treasury Department will have to take extraordinary measures to prevent the country from failing to meet the next debt ceiling in late September or early October.