XPost: talk.politics.misc, alt.fan.rush-limbaugh   
   From: bflatt3xz2@gmail.com   
      
   Bradley K. Sherman wrote:   
      
   >>> One year ago:   
   >>> |   
   >>> | "In the near future, I want to do what has not been done in   
   >>> | 24 years: balance the federal budget. We are going to   
   >>> | balance it," the president said midway through his 90-plus   
   >>> | minute speech. The line got some of the loudest applause of   
   >>> | the night from Republican lawmakers--which might be a small   
   >>> | silver lining, as it indicates at least a rhetorical   
   >>> | interest in fiscal responsibility.   
   >   
   >Today:   
   > |   
   > | $56 trillion national debt leading to a spiraling crisis:   
   > | Budget watchdog warns the U.S. is walking a crumbling path   
   > | ...   
   >inable-path-trump-sugar-high-economy/>   
   >   
      
   $56 trillion national debt leading to a spiraling crisis: Budget watchdog   
   warns the U. S. is walking a crumbling path   
      
   The United States is rapidly accelerating toward a definitive tipping point   
   in its financial history, the Committee for a Responsible Federal Budget   
   (CRFB) wrote in response to the latest 10-year outlook from the   
   Congressional Budget Office. The nonpartisan budget watchdog issued a stark   
   assessment: The current trajectory of borrowing, which is running at double   
   the 50-year historical average, is simply mathematically unsustainable.   
      
   The CRFB cautioned that without immediate legislative intervention, the   
   federal government faces a future defined by exploding interest costs,   
   insolvent trust funds, and a national debt burden that will shatter   
   post–World War II records within four years.   
      
   It amounts to a report card for the Trump administration's first year back   
   in office—potentially its last truly impactful year of President Donald   
   Trump's term, if midterm elections swing either or both of the House and   
   Senate to Democrats. The CBO updated its projections to account for the One   
   Big Beautiful Bill Act (OBBBA), Trump's tariff regime, changes in   
   immigration, and other factors. "With debt approaching record levels,   
   interest costs exploding, trust funds approaching insolvency, and deficits   
   expected to remain more than twice as large as the oft-discussed 3% of GDP   
   target, " the CRFB argued, "lawmakers should come together to enact   
   significant deficit reduction. "   
      
   According to the new CBO projections, the federal debt held by the public   
   is on track to reach a record 120% of gross domestic product (GDP) by 2036.   
   In sheer dollar terms, the pile of money owed by the government is   
   projected under the CBO's baseline scenario to balloon from nearly $31   
   trillion today to a staggering $56 trillion over the next decade.   
      
   The speed of this accumulation is unprecedented in peacetime. The CRFB   
   notes that debt held by the public currently hovers around 100% of GDP,   
   which is already roughly double the 50-year historical average. Under the   
   current baseline, federal debt is set to surpass the all-time record of   
   106% of GDP—set in the aftermath of World War II—by fiscal year 2030.   
      
   The driving force behind this surge is a structural mismatch between what   
   the government spends and what it collects. Spending is projected to grow   
   from 23.1% of GDP in 2025 to 24.4% by 2036. In contrast, revenue is   
   trailing significantly, rising only marginally from 17.2% of GDP to 17.8%   
   over the same period.   
      
   Consequently, the U. S. is facing a decade of massive deficits. The CBO   
   projects annual budget deficits will total $24.4 trillion over the coming   
   decade, exceeding $3 trillion annually by 2036. As a share of the economy,   
   these deficits are expected to average 6.1% of GDP—more than twice the 3%   
   target that economists and the CRFB suggest is necessary to place the   
   national debt on a sustainable path.   
      
   It could easily get worse, too. If the Supreme Court strikes down much of   
   Trump's tariff regime, as expected, and if lawmakers make temporary   
   previsions in the OBBBA permanent while reviving the Affordable Care Act   
   health insurance subsidies, a core Democratic promise, the CRFB estimates   
   debt spiking to 131% of GDP by 2036, rather than 120%. Under these   
   conditions, the deficit would reach $3.8 trillion in 2036, and the risk of   
   a full-blown fiscal crisis would grow exponentially.   
      
   The most alarming aspect of the new outlook is the compounding danger of   
   high interest rates interacting with high debt—the mechanics of what the   
   CRFB calls a "debt spiral. " The CRFB warns that later in the decade, the   
   average interest rate on all federal debt is projected to exceed the rate   
   of nominal economic growth. Economists refer to this dynamic as "R>G" (rate   
   > growth). When the cost of servicing past debt grows faster than the   
   economy that supports it, debt accumulation becomes self-perpetuating,   
   making a fiscal crisis increasingly likely.   
      
   Interest costs are already set to "explode" under current law. Nominal   
   interest payments on the debt will more than double, jumping from $970   
   billion in 2025 to $2.1 trillion by 2036. As a share of the total economy,   
   interest costs will rise from a record 3.2% of GDP in 2025 to 4.6% by 2036.   
   This diversion of resources means that nearly $1 out of every $5 of federal   
   revenue will eventually be consumed just to service the debt, crowding out   
   investment in other national priorities.   
      
   The deterioration of the fiscal outlook is partially the result of recent   
   aggressive policy changes. The CRFB analysis points specifically to OBBBA,   
   which the CBO estimates will add $4.7 trillion to the debt through 2035   
   when accounting for interest and economic effects. While the CBO projects   
   that new tariffs will subtract $3 trillion from the deficit, the net result   
   of recent legislative, administrative, and economic changes has been to add   
   roughly $1.4 trillion to borrowing projections between 2026 and 2035   
   compared to estimates made just a year prior.   
      
   These policies are expected to produce a temporary economic "sugar high. "   
   The CBO projects real GDP will surge by 2.2% in 2026, driven by stimulus   
   from the OBBBA, before slowing to a sustained rate of 1.8% per year   
   thereafter. Inflation is expected to follow a similar trajectory, with the   
   personal consumption expenditure (PCE) price index rising to 2.7% in 2026   
   before settling back toward the Federal Reserve's 2.0% target by 2030.   
      
   However, the stimulus comes at the cost of higher interest rates. The CBO   
   expects the 10-year Treasury yield to climb from 4.1% in 2026 to 4.4% by   
   2031, driven in large part by the federal government's insatiable need to   
   borrow capital.   
      
   Beyond the headline debt numbers, the report highlights an imminent   
   liquidity crisis for the safety net programs relied upon by millions of   
   Americans. Several major government trust funds are approaching insolvency,   
   meaning they will soon lack the reserves to pay full benefits.   
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)