File:CBO - Public Debt Scenarios - June 2011.png

Summary[edit]

Chart & scenario explanations[edit]

The CBO reported during June 2011 two scenarios for how debt held by the public will change during the 2010-2035 time period.

The "extended baseline scenario" assumes that the Bush tax cuts (extended by Obama) will expire per current law in 2012. It also assumes the alternative minimum tax (AMT) will be allowed to affect more middle-class families, reductions in Medicare reimbursement rates to doctors will occur, and that revenues reach 23% GDP by 2035, much higher than the historical average 18%. Under this scenario, government spending on everything other than the major mandatory health care programs, Social Security, and interest on federal debt (activities such as national defense and a wide variety of domestic programs) would decline to the lowest percentage of GDP since before World War II. Under this scenario, public debt rises from 69% GDP in 2011 to 84% by 2035, with interest payments absorbing 4% of GDP vs. 1% in 2011.

The "alternative fiscal scenario" more closely assumes the continuation of present trends, such as permanently extending the Bush tax cuts, restricting the reach of the AMT, and keeping Medicare reimbursement rates at the current level (the so-called "Doc Fix"), versus declining by one-third as mandated under current law. Revenues are assumed to remain around the historical average 18% GDP. Under this scenario, public debt rises from 69% GDP in 2011 to 100% by 2021 and approaches 190% by 2035.

The CBO reported: "Many budget analysts believe that the alternative fiscal scenario presents a more realistic picture of the nation’s underlying fiscal policies than the extended-baseline scenario does. The explosive path of federal debt under the alternative fiscal scenario underscores the need for large and rapid policy changes to put the nation on a sustainable fiscal course."^[1]

References[edit]

Licensing[edit]

	This work is in the public domain in the United States because it is a work prepared by an officer or employee of the United States Government as part of that person’s official duties under the terms of Title 17, Chapter 1, Section 105 of the US Code. Note: This only applies to original works of the Federal Government and not to the work of any individual U.S. state, territory, commonwealth, county, municipality, or any other subdivision. This template also does not apply to postage stamp designs published by the United States Postal Service since 1978. (See § 313.6(C)(1) of Compendium of U.S. Copyright Office Practices). It also does not apply to certain US coins; see The US Mint Terms of Use.
This file has been identified as being free of known restrictions under copyright law, including all related and neighboring rights.

https://creativecommons.org/publicdomain/mark/1.0/PDMCreative Commons Public Domain Mark 1.0falsefalse

Original upload log[edit]

Upload date | User | Bytes | Dimensions | Comment

• 2011-06-25 22:45 (UTC) | Farcaster | 66856 (bytes) | 960×720 | {{Information |Description = CBO Long-Term Public Debt Scenarios |Source = http://www.cbo.gov/ftpdocs/122xx/doc12212/2011_06_22_summary.pdf |Date = ~~~~~ |Author = ~~~~ |Permission = |other_versions = }}