U.S. debt is on an unsustainable path

Nov 8, 2015 SOURCE: Congressional Budget Office, The 2015 Long-Term Budget Outlook, June 2015. Compiled by PGPF.

There are many ways to measure a country’s fiscal health, but the best overall gauge is federal debt relative to the size of our economy (gross domestic product, or GDP). Excluding the various governmental trust funds, our public debt is more than $12 trillion, which is about 74 percent of GDP. That’s already high relative to historical levels, but the real threat is right in front of us: If we do not change our current policies, official projections show that our debt is on an explosive trajectory. The Congressional Budget Office has projected that federal debt could soar to over 175 percent of GDP in 25 years. Studies show that economic growth slows if debt levels remain too high for too long. An economic crisis is likely to occur long before debt gets anywhere near 175 percent, which makes our current path unsustainable.

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