The Congressional Budget Office recently released its projections for federal revenues and outlays in the coming decades. Its baseline assumptions are that the Bush tax cuts are eliminated and that the Alternative Minimum Tax is not reformed, thus ensnaring more and more middle-income people over time. Even with these tax rises assumed, national debt increases substantially, and the percentage of the economy devoted to servicing the debt quadruples within 25 years.
Keep in mind that CBO estimates are notoriously optimistic and never account for economic shocks that always occur from time to time in the real world, so there’s a 99% chance that it is low-balling what the actual debt numbers will be by that time.
The “alternative” scenario, which is more realistic because it assumes that tax revenue will remain closer to the historic average of 18% of GDP, shows the debt increasing to 190% of GDP in 25 years. That’s much higher than Greece’s debt level is today, and if you’ve been watching the news at all, you know how well things are going in that country.
Those kind of numbers might actually be scary enough to make Congress and the president grow backbones and cut some spending, but let’s not hold our breaths. They’ve kicked the can for so long, they may not know what else to do.