The US is about to end this fiscal year with a $407 billion budget deficit that is more than double what it was in 2007 – and the red ink is projected to flow on.
Even before the full cost of the government takeover of Fannie Mae and Freddie Mac is calculated, the Congressional Budget Office (CBO) projects that the nation will add more than $2.3 trillion to the national debt over the next 10 years.
…What’s driving deficits is “an unusual amount of turbulence” in the US economy this year, including depressed housing markets, fragile financial markets, and soaring prices for energy and food, along with the cost of war, according to the CBO. But the biggest long-term threat is rising health care costs and the retirement of the “baby boom” generation.
“As we have said over and over in the past, the nation is on an unsustainable long-term fiscal course driven primarily by rising health care costs,” said CBO director Peter Orszag at a briefing on Tuesday. “And that does need to be addressed before a crisis hits.”
…Although Washington’s capacity to ignore fiscal warnings is well established, budget analysts say that the news is now sufficiently alarming, especially the fallout from the housing crisis, that it could set off a national wake-up call.
“Next President Faces Swelling US Debt” via the CSM
