See no Problem with Rising Government Debt or Endless Spending Increases? Think Again!!!

When you lose the CBO, maybe; just maybe, you lose middle America by speaking common sense:

“The increase in debt relative to the size of the economy, combined with an increase in marginal tax rates (the rates that would apply to an additional dollar of income), would reduce output and raise interest rates relative to the benchmark economic projections that CBO used in producing the extended baseline. Those economic differences would lead to lower federal revenues & higher interest payments. … At some point, investors would begin to doubt the government’s willingness or ability to pay U.S. debt obligations, making it more difficult or more expensive for the government to borrow money. Moreover, even before that point was reached, the high & rising amount of debt that CBO projects under the extended baseline would have significant negative consequences for both the economy & the federal budget.”

CBO “Long-Term Budget Outlook” (2013)

Deficit Spending Matters:

The US federal deficit fell to about 4% of GDP this year from 10% peak in 2009. But while discretionary expenditure was cut, entitlement spending rose so that the deficit will likely exceed 6% by 2038. In turn, this affects CBO projections for the ratio of public-sector debt to GDP that was thought to be 52% by 2038 but is now expected to be about 100%, perhaps rising to above 200% by 2076.

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About christopher

Content of "Natural Order" attempts to reflect the commitment of Universidad Francisco Marroquin to support the development of a society of free & responsible individuals. The principal commentator for this blog is Christopher Lingle.

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