The United States is on a collision course with its own history, and about to break fiscal records in the worst possible way. With current policies and spending, the country’s national debt will surge to 120% of GDP by 2030, eclipsing the previous record of 106% set right after World War II. Fiscal watchdogs are warning that such high levels of debt effectively amount to a self-inflicted wound, as the U.S. abdicates its responsibility to its citizens, sustainable economic growth, and national security.
The projections have drawn blistering reactions from nonpartisan watchdogs, perhaps none more so than Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
“CBO’s baseline—as bad as it is—assumes interest rates will remain moderate and that we will face no costly unforeseen events. If those rosy projections do not transpire, the damage will only be worse,” Michael Peterson, CEO of the Peter G. Peterson Foundation, a fiscal research nonprofit, told Fortune.
Phillip Swagel, the CBO’s director, echoed this urgency in his own statement, directly declaring that the agency’s projections “continue to indicate that the fiscal trajectory is not sustainable,” and that the government’s growing bill also risks undermining business spending and growth elsewhere in the economy.
“When the federal government borrows in financial markets, it competes with other participants for funds, and that competition can push up interest rates and crowd out private investment,” he said.
In her statement, MacGuineas also noted how a heavy debt load is already threatening some of the nation’s core safety nets with insolvency. The Highway Trust Fund, a mechanism to finance transit infrastructure maintenance, is projected to be exhausted by 2028, and the Social Security Old-Age and Survivors Insurance Trust Fund, a retirement funding program, is now expected to run out in 2032—one year earlier than previously estimated.
If current laws remain unchanged, the CBO projects that federal debt will climb to a massive 175% by 2056. MacGuineas concluded that the lack of fiscal leadership is a direct threat to the country, urging lawmakers to get serious: “I encourage every member of Congress and the president to take a cold hard look at these numbers and pledge to fix our nation’s finances before it is too late.”
