Hi! 👋 I'm @washingtonpost.com's economy geek in Congress, and today the Congressional Budget Office put out some long-term projections about the national debt.
And *some* of that stuff is pretty important. So lets unpack with a quick thread. Hopefully, you'll learn something new.
🧵...
And *some* of that stuff is pretty important. So lets unpack with a quick thread. Hopefully, you'll learn something new.
🧵...
Comments
How much can we trust your reporting not to be tilted to favor his financial interests?
What will you do when asked to bury the obvious, easy, popular fix - i.e. tax billionaires more?
If Bezos ever interfered with my work or it was even suggested, I'd quit. On the spot. And I'd make sure the world knew about it.
That way he can use his government printed dollars to buy more trucks and expand his postal services
He very much hopes that Musk keeps printing dollars that he relies on to stay solvent
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This just might interest you for tomorrow at the lounge.
And it could get worse. Fast.
This ⤵️ is what CBO says will happen under current law.
But Trump and Republicans are working on a major tax cut that will spike the national debt even more. And that's not reflected in this data.
And by 2055, our debt will be more than 1.5 times our total economic output.
That's a scary number because it means our economy is not growing fast enough for us to pay off our borrowing.
You need more to unpack that chart.
"Debt in the public hands" is debt that is issued and traded. But for a long, long time that is not the total debt of the USA.
Why? Because of accounting.
For decades, the boomer generation has been paying in more to Social Security than has
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When that happens, the government colloquially passes and I-Owe-You to the Trust Fund. So debt-in-the-public-hands plus the IOUs is equal to the total debt.
So, the total debt to GDP ratio has for a long time been as high as those projected, while debt-in-the-public hands is lower.
Back when Bush-43 battled Al Gore for the Presidency, Gore promised to put the receipts from Social Security into a 'lock box'.
After idiots voted for Bush and he got the Rhenquist bump, he did the opposite.
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Choices.
We got set-up for this by bad Republican policies.
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In 2024 -- in peacetime, during a year of great economic growth -- the US ran a 6.4% deficit. That's crazy.
By 2055, that will be up to 7.3%.
BUT by then we'll have to fix Social Security and Medicare. Odds are the deficit could be much higher.
See the first table.
https://www.cbo.gov/publication/61270
Things like Social Security and Medicare rely on stable population and workforce growth.
That way people working today pay into those programs to support current beneficiaries, and so on.
Immigration is *key* to making the numbers work.
By 2033, US population starts to decline. By 2049, there's no population growth at all.
So even if there's a near-term fix for Social Security, long-term demographics are a bigger problem.
Which is saying something, because the US has been near full employment for a couple years now coming out of covid.
But projections for labor participation -- yikes: Down around 60% within the decade.