You think the US debt to GDP of 105.4% is high. Well, it is. But you ain’t seen nothing yet!

2093 is a long way away, but the US Debt to GDP could be as high as 600% by 2093. Plenty of time to correct if Congress cared to do so.

According to the Committee for a Responsible Federal Budget,  the United States will not be able to sustain its current fiscal course over the next 75 years. While CBO’s 30-year budget outlook already shows a bleak picture of rapidly rising deficits and debt, both would grow to unbelievable levels over the very long term.

Under current law, we project deficits will reach 20 percent of GDP by 2093 and debt would total 360 percent of GDP. If allowed to occur, such high levels of debt would mean a substantial reduction in economic growth, a large increase in interest rates, and an explosion of federal interest costs. In reality, there is virtually no historic or international precedent for such high levels of debt. If policymakers refused to act to prevent this debt accumulation, a fiscal crisis could force corrective action.

Even this scenario is in many ways optimistic. The Alternative Fiscal Scenario, showing the continuation of expiring tax cuts and spending increases, has an even bleaker outlook. In this case, we estimate deficits would reach 35 percent of GDP by 2093, and the national debt would total 600 percent of GDP. Such a debt load is in many ways unimaginable.

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And, of course, the massive expansion anf cost of health care (aka, Medicare) will bankrupt the US.

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Congress will likely say “Let it ride” until it explodes.

Say, will The Federal Reserve try to purchase federal debt when it will exceed 3.5 times the size of the economy under current law and 6 times the size of the economy assuming policymakers continue current policies?

Jay Powell quarterbacking The Fed to obliteration.

unclerico