Earlier this year the Treasury Department made a stunning announcement. The US Government’s budget deficit had fallen to the lowest level in 7 years, down to $412 billion, despite increases in government spending. This was $79 billion less than last year, and marks the most financially sound year of the Obama administration. Given those numbers, you’d be forgiven for thinking that our government’s debt problem was finally being resolved.
In reality, our unfunded liabilities will all but obliterate that progress in the years ahead. The Congressional Budget Office (CBO) has projected that the US deficit will more than double in the next ten years. The CBO believes that government revenue will continue to increase, and will reach $5 trillion by 2025, which would be roughly 50% higher than it is today. However, government spending will grow at a much greater rate, and will increase faster than economic growth. “Later in the coming decade, under current law, growth in outlays would outstrip growth in the economy; outlays would rise to 22 percent of GDP in 2022 and remain at that level through 2025.”
By 2025, the US Government will have a $1 trillion deficit, which would be a 135% percent increase from today’s deficit. The CBO also expects interest rates to rise significantly over the next 10 years. And these numbers don’t seem to take into account the possibility of an economic downturn. The last recession managed to push our deficit well above $1 trillion. If anything bad happens to our economy over the next 10 years (which is practically guaranteed) our government’s debt will be astronomical.
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Contributed by Joshua Krause of The Daily Sheeple.
Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger .