As breitbart tells MHProNews, the non-partisan Congressional Budget Office (CBO) has periodically warned of irresponsible spending that has deleterious long-term effects on the solvency of the United States.
The CBO says the net federal debt’s share of the overall economy will steadily rise from “75 percent of GDP in the wake of the financial crisis, to 86 percent in 2026 and 141 percent in 2046.” That is higher than the historic peak of 106 percent of gross domestic product (GDP) at the end of World War II.
The debt future is getting bleaker: Last year the CBO predicted the federal debt would not reach 126 percent until 1940, and it is ahead of that now.
It says federal tax revenues as a share of GDP will be flat over the next ten years, moving between 18.0 percent and 18.2 percent; but in 2026 the average tax bill will increase sufficiently to raise the federal tax revenues as as share of GDP to 19.4. However, the CBO estimates that the higher tax rates will dampen economic activity, reducing overall tax revenue.
This will also reduce the Gross National Product per person from an average of 1.9 percent over the last 50 years to 1.3 percent annually over the next 30 years.
Mounting debt will reduce national saving and income, increase government’s interest bill, put more pressure on other aspects of the budget, limit the ability of the government to respond effectively to catastrophes and wars, and perhaps spur a financial crisis.
According to breitbart, “Given that the self-serving federal bureaucracy usually advocates for an increase federal tax rates, a warning from the respected CBO that high tax rates are about to impoverish America will have a significant influence on future public policy debates.” ##
(Image credit: fotosearch–moneyed crystal ball)
