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NEW YORK — Michael A. Peterson, CEO of the Peter G. Peterson Foundation, commented today on the release of the Congressional Budget Office’s updated 10-year Budget Outlook:
“CBO’s report is the first analysis to fully take into account the multitude of harmful economic and fiscal effects of this pandemic. Defeating this disease and restoring our economy remain our most pressing national priorities, but today’s report confirms the significant damage that this crisis has inflicted on our already weak fiscal outlook.
“It’s no secret that the U.S. was on an unsustainable fiscal path before this pandemic. We were set to have a trillion-dollar deficit this year, even in a strong and healthy economy, which is a tragic level of fiscal irresponsibility at a time when deficits should have been shrinking.
“This report shows that our unsustainable fiscal challenges have rapidly accelerated, as our national debt will now exceed the size of our entire economy next year. We thought we had a full ten years before reaching this unfortunate milestone, but the virus wiped out a decade of fiscal space in just a few months. Worse yet, by 2023 we will break the all-time record for debt-to-GDP, which was set just after World War II.
“Favorable demographics and productivity growth helped create a post-war boom that helped America out of that deep fiscal hole, but this time around we unfortunately will not have the benefit of such positive trends. Structural factors including an aging population, rising healthcare costs, and compounding interest — along with insufficient revenues to meet our commitments — were the primary drivers of our fiscal challenge before the virus, and they will remain so once the crisis has passed.
“This health and economic crisis is a reminder of why fiscal responsibility is important in the first place. Preparedness is an essential quality of successful, leading nations. Unsustainable fiscal policy diminishes our ability to invest in the future and respond to the unexpected. When this devastating pandemic is behind us, our leaders must come together to address our growing debt to ensure a more prepared, more stable and more prosperous future for the next generation.”
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