CBO Reveals Magnitude of Reform Needed for Sustainable Fiscal Future

Stephen Keen / June 30, 2010

The Congressional Budget Office (CBO) released their annual Long-Term Budget Outlook today, and the updated projections—which include the effects of Obamacare—paint a grim picture. If Obamacare really did bend the cost curve down, CBO shows little evidence of it in this report.

In fact, CBO openly admits that “projections understate the severity of the long-term budget problem because they do not incorporate the significant negative effects that accumulating substantial amounts of additional federal debt would have on the economy.”

Here are a few highlights:

• Debt held by the public will reach 62 percent of Gross Domestic Product (GDP) by the end of this year — this is the highest percentage since 1951.
• Under current law, federal spending on major mandatory health care programs will grow from approximately 5 percent of GDP today to about 10 percent in 2035, which includes ALL effects of the Obamacare legislation. (more…)