The Congressional Budget Office (or CBO as it is known) is a federal agency within the legislative branch of the U.S government that provides budget and economic information to Congress. The CBO is strictly non-partisan, and does not make policy recommendations.
That’s why its latest report is so frightening.
According to new projections released by the CBO on 3/30/17- Government debt and budget deficits are both set to spiral higher in the next 30 years if current patterns hold. The report warns that the rising debt and deficits, threaten another financial crisis.
The CBO report stated:
“The prospect of such large and growing debt poses substantial risks for the nation, and leaves policymakers with significant challenges. Large and growing federal debt over the coming decades would hurt the economy and constrain future budget policy & hurt the prospects for economic growth”
Due largely to increases in Medicare and Social Security costs, the federal debt will reach 150% percent of gross domestic product in 2047, according to the report.
Watch more from CNBC below.
The current total debt level of $18.8 trillion is about 101 percent of GDP. In addition to rising debt, the CBO also said:
“The budget deficit will more than triple from the projected 2.9% percent of GDP in 2017 to 9.8 percent in 2047.”
The CBO says rising interest rates is another main reason for skyrocketing debt.
“Rising deficits will add to the debt load because the government will be forced to borrow more at higher rates to cover expenses that will exceed revenues”
To get the debt and the deficit under control, the CBO recommends the government cut spending and increase revenue.
Listen to Phil Cannella and Joann Small’s exclusive interview with Harry Dent on the Crash Proof Retirement Show, below.