(CSM) Recession averted, but rising debt still a threat, CBO warns

Posted by Kendall Harmon

The CBO forecast finds a persistent mismatch between tax revenue and spending over the coming decade. As the economy improves, tax revenue should rise to 19 percent of GDP for the period from 2015 through 2023, up from 15.8 percent in 2012, the report said. But federal spending, after an early-decade dip, will start rising persistently faster than revenues.

"After 2017, if current laws remain in place, outlays will start growing again as a percentage of GDP," the CBO said. "The aging of the population, increasing health care costs, and a significant expansion of eligibility for federal subsidies for health insurance will substantially boost spending for Social Security and for major health care programs relative to the size of the economy."

The CBO's current-law "baseline" calls for spending to reach about 23 percent of GDP in 2023 and, more worrisome, to be "on an upward trajectory."

Read it all.

Update: An IBD article is also available on this, entitled "CBO Report Shows We're Still Headed Toward A Fiscal Cliff" and it may be found there.



Filed under: * Culture-WatchAging / the Elderly* Economics, PoliticsEconomyThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentBudgetMedicareSocial SecurityThe National DeficitPolitics in GeneralHouse of RepresentativesOffice of the PresidentPresident Barack ObamaSenate

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Posted February 6, 2013 at 7:14 am [Printer Friendly] [Print w/ comments]
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