Federal debt will nearly double the nation’s Gross Domestic Product by 2052 if it continues on its current trajectory, the U.S. Congressional Budget Office says in its economic and debt forecast released Wednesday.
U.S federal debt surpassed $30 trillion in February, and the most recent GDP data showed a decline of 1.6% in the first quarter of 2022. GDP second quarter data is set to be released Thursday.
Overall, the ratio of debt to GDP is expected to get much worse over the next three decades given current spending levels and the cost of holding high levels of debt because of interest rates.
“In CBO’s projections, debt as a percentage of GDP begins to rise in 2024, surpasses its historical high in 2031 (when it reaches 107 percent), and continues to climb thereafter, rising to 185 percent of GDP in 2052,” CBO said.
Deficits, though they have been reduced since the major COVID-era spending, would also increase. That means the debt grows faster the more time goes on.
“Nevertheless, in CBO’s projections, federal deficits over the 2022–2052 period average 7.3 percent of GDP (more than double the average over the past half-century) and generally grow each year, reaching 11.1 percent of GDP in 2052,” CBO said.