Slouching toward Debt

Source: Hoover Institution
by David R Henderson

“If the federal debt continues to grow at the rate predicted by the Congressional Budget Office, then, to avoid default in the 2030s, Congress will have to pass a package of spending cuts and tax increases. On the tax side, though, Congress is constrained by one of the few constants that we ever see in macroeconomics: the size of federal tax revenues as a percent of gross domestic product. If that constant holds up in the future, the only choices would be large spending cuts or a default on the federal debt.” (05/17/23)