The CBO's latest warning

The Congressional Budget Office has just issued a white paper entitled Federal Debt and the Risk of a Fiscal Crisis. In it they note that the federal debt is now higher than it has been since World War II, and they make two projections. The "extended baseline" projection, assuming the laws as they stand now, has the debt reaching 80% of GDP by 2035. The "alternate fiscal scenario", which assumes some expensive changes the CBO expects this Democratic administration to enact (such as renewing the 2001 and 2003 Bush tax cuts, and increasing Medicare payments to physicians over time) grows the federal debt to 110% of GDP by 2025, and to 180% of GDP by 2035. By comparison, Greece is in deep financial trouble with a debt of only 115% of GDP (as of 2009).

The underlying point is simply that the CBO thinks we are on an unsustainable path, and at increasing risk of a fiscal crisis that would make the current recession look minor. I fully agree with them.

Unfortunately, this report, issued this past Tuesday, is being largely ignored by both the media (more interested in the Wikileaks issue and Rep. Rangle's ethics problems) and, more significantly, by Congress and President Obama. Clearly the issue shouldn't be which expensive new program to pass next - we are ALREADY in trouble. The only issue ought to be where to CUT the Federal budget first.