Opinion: “Let the Budget Debate Begin”

CBO’s Baseline Projections

It’s February so it’s time for the Congressional Budget Office (CBO) to release their “Baseline Budget Projections”. They released them earlier this month and it can be found on their website. As is the usual case I downloaded some of the schedules:

Table 1-1:Baseline Budget Projections, by Category
Table 1-2:Baseline Projections of Federal Debt
Table 1-3:Mandatory Outlays Projected
Table 1-4:Baseline Projections of Discretionary Spending

Each of these schedules include “Actual” for 2020 and “Projected” for 2021 to 2031, all based on current law. So it is very important for us to understand what to expect without any changes.

Gross Federal Debt$26,901 b$28,467 b$39,975 b
Public Federal Debt$21,019 b$22,461 b$35,304 b
Gross Domestic Product (GDP)$21,000 b$21,951 b$32,933 b
Gross Debt to GDP128.1%129.7%121.4%
Public Debt to GDP100.1%102.3%107.2%
Annual Deficit -$3,142 b-$2,258 b-$1,883 b

All the discussion about COVID-19 relief, infrastructure investments and reparations is not included in these numbers. We’ll learn more about the cost of those initiatives and any others proposed by President Biden when the WH OMB releases their 2022 Budget projections.

From 1791 to 1969 the basic principle that our nation’s finances was based on was debt was something a strong nation worked to avoid. We actually eliminated the nation’s debt after the War of 1812 and eliminated two thirds of our debt after the Civil War. Beginning with 1970 using debt even during times of prosperity and relative peace became an accepted policy. That has resulted in only four surpluses in the past fifty-two years and eleven projected deficits on top of those.

Is that anyway to run a country? Only if you are attempting to bankrupt it!

(Think Cloward – Piven strategy.)

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