July 20, 2024

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CBO: US adds $2.1tn to national debt obligations in 3 months

2 min read

But while some of the most influential figures in the economy are calling for an action plan, the government has continued to spend at a rate which will add $2.1 trillion to the country’s bill by 2034.

That’s according to the latest report out of the Congressional Budget Office (CBO). In February the CBO said its predicted deficit for the year was $1.5 trillion, growing to $2.6 trillion by 2034.

However in a report released this week the CBO wrote: “In CBO’s current projections, the deficit for 2024 is $400 billion (or 27%) larger than it was in the agency’s February 2024 projections, and the cumulative deficit over the 2025–2034 period is larger by $2.1 trillion (10 %).”

Currently America’s national debt stands at $34.7 trillion—though the figure itself is not what has so many economists worried. Instead, experts are concerned about America’s debt-to-GDP ratio, which indicates how much the country owes vs what it produces and thus, how able it is to pay it back.

The CBO didn’t have stellar news on that account either. It reported debt held by the public will rise from 99% of GDP this year to 122% by 2034—surpassing its previous high of 106% in 1946, at the end of the Second World War.

And war is, once again, one of the major factors contributing to America’s ongoing outlays. The CBO adds: “The largest contributor to the cumulative increase was the incorporation of recently enacted legislation… which added $1.6 trillion to projected deficits.

“That legislation included emergency supplemental appropriations that provided $95 billion for aid to Ukraine, Israel, and countries in the Indo-Pacific region.”

On top of the initial legislative hit is the ongoing funding obligations America is legally required to uphold, boosting outlays by $900 billion through to 2034.

While financial support to nations at war forms a chunk of the increase between the February 2024 projection and this month’s, other…

Eleanor Pringle

2024-06-21 07:05:37

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