CBO report: Debt will rise to 90% of GDP

[thundley4]

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.

In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the next decade.

"An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference," said Brian Riedl, a budget analyst at the conservative Heritage Foundation. "That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying."

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.

That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.

Washington Times

To make it worse, the CBO ends up on the low side more often than not.

[zeitgeist]

Dolan had a great piece in this weeks Barron's.

{excerpt}

In the next 10 years, the U.S. will spend at least $6 trillion more than it levies. That assumes no changes in current law, so it includes the big tax increase due next year when all the Bush tax cuts expire, and another big tax increase from using the full-strength version of the alternative minimum tax. It also ignores the cost of whatever health-care reform is enacted. An accounting that accepts the continuation of some of the tax cuts calls for more than $10 trillion of red ink over the next decade
{excerpt}

The link is here but requires a log-in.

I have no idea if you can use Bugmenot

Taxes and spending cuts will both be needed in large measure.

[Javelin]

I am just curious... are there any models out there that show where a country has survived from this kind of debt without a collapse or total transformation politically/economically?

[The Village Idiot]

I bet this doesn't take new spending items that will come up into account

[Hawkgirl]

I am just curious... are there any models out there that show where a country has survived from this kind of debt without a collapse or total transformation politically/economically?

We're headed for the USSofA.  We'll be standing in line for toilet paper like the russians.  Inflation is going to sphere out of countrol pretty soon.

[Javelin]

We're headed for the USSofA.  We'll be standing in line for toilet paper like the russians.  Inflation is going to sphere out of countrol pretty soon.

Sometimes I feel like we are already the USSA.  As to inflation, it has not even really begun but it will soon.  Then on top of it we may be able to enjoy the VAT coming to a store near you lol.... Ok its not really funny, but nonetheless sometimes I feel like I am in some kind of Dumb and Dumber movie starring the idiots of Washington.