When Obama took office, our national debt was $10.6 trillion; as of today, it stands at over $19 trillion. The Congressional Budget Office (CBO) has issued a report that states our national debt will reach $28.2 trillion over the next ten years.
The Washington Free Beacon reports:
Outstanding federal debt is projected to hit $28.2 trillion over the next decade, according to a report from the Congressional Budget Office.At the end of this year, outstanding federal debt is expected to climb to $19.4 trillion and to rise by $8.8 trillion in the next ten years.The federal government’s budget deficit, which is the difference between how much money the government spends and how much money it takes in through tax collection, will be $590 billion by the end of 2016, $152 billion more than the previous year.Government spending is projected to increase by 5 percent, or $178 billion, while government revenue is projected to increase by less than 1 percent, or $26 billion.The rise in government spending is attributed to a 6 percent increase in outlays for Social Security and Medicare, a 1 percent increase in discretionary spending, and an 11 percent increase in net interest.
Consequences of the rising debt are addressed in the report.
The Washington Free Beacon continues:
The budget office says that rising debt will have serious consequences such as a substantial increase in spending on interest payments, a decrease in the nation’s capital stock, and declining productivity and wages, all of which increase the likelihood of a fiscal crisis.The report projects that economic growth will expand at an average rate of about 2 percent in the second half of the decade, a slowdown from the average growth rates recorded during the 1980s, 1990s, and early 2000s.The budget office says that rising debt will have serious consequences such as a substantial increase in spending on interest payments, a decrease in the nation’s capital stock, and declining productivity and wages, all of which increase the likelihood of a fiscal crisis.The report projects that economic growth will expand at an average rate of about 2 percent in the second half of the decade, a slowdown from the average growth rates recorded during the 1980s, 1990s, and early 2000s. The budget office attributes this slowdown in projected growth to the nation’s low labor participation rate, which measures the percentage of the population that either had a job or sought one in the past month.In the second quarter of 2016, the labor force participation rate was 62.7 percent. According to the Bureau of Labor Statistics, this is the lowest rat“The rest of the projected decline in potential labor force participation stems from the Affordable Care Act and the structure of the tax code, both of which reduce workers’ incentive to supply labor,” the report states. “The Congressional Budget Office projects that employment as a percentage of the population will fall to 57 percent in 2026, reflecting that decline in the potential labor force participation rate.”e recorded since 1978.The budget office attributes the decline in labor force participation to demographic trends such as the aging of the baby boomer generation. Lingering effects of the recession, a weak recovery, and federal policies such as Obamacare and the tax code have also depressed labor force participation.
The CBO notes that ObamaCare and the structure of the tax code disincentivize work.
The Washington Free Beacon explains:
“The rest of the projected decline in potential labor force participation stems from the Affordable Care Act and the structure of the tax code, both of which reduce workers’ incentive to supply labor,” the report states. “The Congressional Budget Office projects that employment as a percentage of the population will fall to 57 percent in 2026, reflecting that decline in the potential labor force participation rate.”
It is worth noting that the CBO predicted in 2009 that our national debt would be $14.9 trillion by 2019. We exceeded that in 2011.
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