The Congressional Budget Office said Tuesday the nation's debt is on an unsustainable path and warned that by 2038 if current law continues federal debt held by the public would hit 100% of GDP.
The nonpartisan CBO added by the same timeframe if no action by Congress is taken entitlement spending would increase to 14% of GDP, or twice the average over the last 40 years, and the annual deficit would grow to 6.5% GDP, bigger than any year between 1947 and 2008.
“The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices,” the CBO wrote in its latest report on the long-term budget outlook.
Unless “substantial changes are made to the major health care programs and Social Security,” in the future those programs will drain an ever larger amount of the total economy’s output, the report warns
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