Here’s an article from MarketWatch about the Congressional Budget Office (CBO) forecast for the next 10 years. In essence, they are predicting that we’ll have average deficits of $1.2 trillion per year for the next decade. Of course, that is only “on budget” forecasts. They don’t include “off budget” items like emergencies or disasters.
In 2019, the annual U.S. deficit is forecast to rise to $900 billion from $779 billion in 2018. The deficit is projected to top $1 trillion annually beginning in 2022 — two years later than the CBO originally forecast.
Let’s see how accurate the $779 billion in 2018 actually was. This next snippet is from www.treasurydirect.gov/NP/debt/current
|Date||Debt Held by the Public||Intragovernmental Holdings||Total Public Debt Outstanding|
Intragovernmental Holdings are the theoretical Trust Fund Balances, e.g. SS, Medicare, etc. Trust fund receipts are collected and then promptly replaced with “Special Treasury Bonds” that are essentially a loan from one pocket of government to another pocket of government. Some of this $183 billion was payroll taxes and some was due to interest payment increases (again from one pocket to the other pocket.) They don’t separate the 2 streams here. What’s important to know about the money in this column is that the money has already been collected from your payroll taxes and spent. It is only a fictional accounting entry to make people feel that the money is still there. If it really were still there, our debt problem is ~36% worse than CBO admits.
The Debt Held by the Public is the column the CBO focuses upon. The $1.088 trillion TOTAL deficit for FY2018 is ~40% larger than the “on budget” $779 billion deficit they admit. That’s how much those pesky “off budget” expenditures cost. Since congress likes to hide as much as possible off budget, that percentage increase will likely continue. It isn’t unconservative to add 40% to the projected deficit for the next 10 years. With that increase, we’re looking at $16.75 trillion (just for this column) rather than the puny $12 trillion forecast.
Of course, the CBO’s less than rosy forecast doesn’t include a recession(s) in the next 10 years. This expansion is already long in the tooth. It needed constant aid from federal reserve low interest rates as well as huge budget deficits. Any true Keynesian economist should know that his philosophy stipulated that debt be paid back during good economic times. We’ve obviously never had good economic times since the 1920s since we have constantly gotten deeper in debt. Either that, or we really can’t trust our government to actually follow through on this worthless philosophy.