Additional Coverage:
- New budget projections show US hitting debt record in 4 years: CBO (foxbusiness.com)
Federal Debt Poised to Surpass Historic Levels
The Congressional Budget Office (CBO) has released its latest economic outlook, projecting that the U.S. government will break the federal debt record set in 1946. As a percentage of the economy, the debt held by the public is expected to rise from 98% to 107% by 2029, surpassing the current record of 106%.
Growing Deficit and Entitlement Spending
The federal budget deficit is projected to reach $1.9 trillion in 2025, with further increases in the following years. This growth is largely attributed to rising costs associated with Social Security and Medicare as the population ages, as well as increased interest payments on the national debt.
Social Security Trust Fund Depletion
The Social Security Old Age and Survivors Insurance Trust Fund is projected to become exhausted in 2033. When this occurs, beneficiaries may face a 21% reduction in benefits.
Consequences of Rising Debt
Experts warn that a high debt burden weakens the country’s economic stability. It can lead to higher interest rates, decreased investment, and a decline in the nation’s creditworthiness.
Solutions Proposed
The CBO report outlines potential solutions to address the fiscal challenges, including reducing spending and increasing revenue. Some experts suggest implementing policies that promote economic growth, such as infrastructure investments and tax incentives.
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- New budget projections show US hitting debt record in 4 years: CBO (foxbusiness.com)