U.S. Outlook: A sobering budget forecast

Scott Anderson
Posted by Scott Anderson
Chief Economist

The Congressional Budget Office (CBO) updated its economic and federal budget outlook for the next 10 years, and we find the budget path the U.S. government is on quite sobering.

Graph showing projected rise in national debtThe CBO downwardly revised its real GDP forecasts since last March’s budget projection, but we think the revised growth rates over the next three years are probably too optimistic.

For more details, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Sept. 2.

Key observations:
  • On the interest rate outlook, the CBO appears a bit too assured that Fed rate hikes and long-term interest rates will remain low by historical standards.
  • There is a strong possibility U.S. growth turns out worse than this budget outlook assumes.
  • Our national debt, according to the CBO, is expected to increase more than 75% over the next 10 years.
  • The takeaway from this analysis should be that fiscal policy changes need to be made sooner rather than later, because the course we have laid out for ourselves today is not sustainable.

 

Click here to read my full report.

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