James Pethokoukis

Politics and policy from inside Washington

The scariest U.S. budget chart out there

June 22, 2011

The Congressional Budget Office just came out with its mid-year update to its long-term budget forecast. Lots of terrifying stuff in there. But if I was only going to pull out one bit, it would be this chart showing the likely path of America’s debt-to-GDP ratio between now and 2035 assuming a) likely fiscal policies and b) massive debt would actually impact economic growth. It’s not a pretty picture:

 

Comments

Yikes.

I’m no economist but… how screwed up (software term) would the rest of the economies of the world have to be for anyone still to be buying US debt when we’re anywhere near 150% of GDP much less 200% or 250% ??

In other words, wouldn’t something very important necessarily have to “give” (break, collapse, implode, explode, melt) that prevents the chart from playing out that way after around 2025?

Which isn’t to say the chart isn’t scary. It absolutely is. My frustration level over D.C. is breaching new territory. I liken this chart to Cher slapping Nick Cage, “Snap out of it!”

@DanFarfan

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