CBO's 2011 long-term budget outlook

Original publisher: Washington, D.C. : Congress of the United States, Congressional Budget Office, [2011] OCLC Number: (OCoLC)750396928 Subject: Budget -- United States -- Forecasting. Excerpt: ... CH A P T E R 1 The Long-Term Outlook for the Federal Budget he federal government has recently been recording T alternative scenario, debt held by the public would equal the largest budget deficits, relative to the size of the econ-more than 100 percent of GDP in 2021 rather than about 75 percent. omy, since 1945. As a result, the amount of federal debt held by the public has surged. Debt is expected to equal This report presents CBO's estimates of the long-term roughly 70 percent of the economy's annual output, or budget outlook under both sets of assumptions - an gross domestic product ( GDP ), at the end of this fiscal extended-baseline scenario, reflecting the assumption that year, up from 40 percent at the end of 2008. That sharp current laws do not change, and an alternative fiscal deterioration in the fiscal situation reflects several factors: scenario, which incorporates several changes to current an imbalance between spending and revenues that pre-law that are widely expected to occur or that would dated the 2007 - 2009 recession and turmoil in financial modify some provisions of law that might be difficult to markets; a decline in tax revenues and an increase in sustain for a long period, thus maintaining what some spending on benefit programs caused by that economic analysts might consider " current policy " as opposed to downturn; and the costs of federal policies enacted in current law. response to the downturn. Looking beyond the next decade, the fiscal outlook If current laws were to remain unchanged, the budget worsens further. Although long-term budget projections deficit would drop markedly as a percentage of GDP in are highly uncertain, if current laws remained in effect, the next few years, the Congressional Budget Office the aging of the populat...