John Wood ― The news is in: Budget deficit is still unsustainable
John Wood, the former Republican candidate for Congress offers some sobering facts about the national debt.
Some in the public policy conversation have celebrated the recovery of the American economy in recent years. But a close analysis of the underlying trends of our fiscal and economic circumstances will find it difficult to identify much that is worth celebrating.
Diminishing unemployment rates aside, we have seen an economic recovery produce the lowest labor-force participation rate in 37 years (a figure that is much more than a reflection of increasing levels of retirement), an annual GDP growth rate of between 1.6 to 2.5% in the years since the end of the recession (as compared to rates between 3.5 and 7.3% in the same period following the recession of the early 1980’s), and an annual deficit now declined to a level that, while still producing record shattering annual debts, is still roughly equal to the then record setting deficit levels that preceded the recession…and poised now to rise again.
The Congressional Budget Office has released findings suggesting that the United States is positioned to experience what would appropriately be called radical deficit increases beginning after 2016, with deficit levels projected to rise from $455 billion dollars in that year, back up to 1 trillion dollars if current law and projected spending and revenue levels hold. While this level is still short of the high-water marks reached in the years immediately following the “Great Recession,” it would constitute in those years an increase of 7.2 trillion dollars to the national debt (a debt that today sits at over 18 trillion dollars and, depending on how one defines the national debt, is already over 100% of Gross Domestic Product.)