Statement from Foundation President, Michael A. Peterson, on CBO’s Long-Term Budget Outlook

FOR RELEASE

Jun 5, 2012

CONTACT


Peter G. Peterson Foundation press@pgpf.org

“The message of this CBO report is clear — the nation’s current fiscal path is unsustainable over the long term. A federal debt level of 200% of GDP within 25 years would place an unthinkable burden on the next generation — trillions in interest payments would crowd out much needed investments in our economy, and the safety net could be shredded as resources become scarce.

CBO also recently warned that the confluence of expiring tax cuts and automatic spending reductions occurring at the end of the year could lead to another recession if our current course isn’t altered. Our elected leaders should use the need to act on these year-end events as an opportunity to put in place a comprehensive bipartisan fiscal plan that gets implemented when the economy recovers. Agreeing on a plan that shows that America is getting its fiscal house in order would give the economy a badly needed boost of confidence in the short term, and put America on a much more sustainable and prosperous path for the long term.”

Click here to listen to Michael Peterson discuss CBO’s Long Term Budget Outlook on SiriusXM’s “The Morning Briefing with Tim Farley”, broadcast June 8, 2012.

Further Reading

Federal Reserve building

What Is Fiscal Dominance?

Fiscal dominance occurs when the national debt — and especially high interest costs — forces the hand of monetary policymakers.

Can We Grow Our Way Out of the National Debt?  

The gap between what economic growth can realistically deliver and what fiscal sustainability requires is too large to bridge without also addressing the structural imbalance between federal spending and revenues.