Last week the Congressional Budget Office announced that the budget deficit for 2017 will top $665 billion, the highest level since 2013. Worse, while the deficit in 2013 was still being driven in part by one‐time spending items, including TARP and the stimulus bill, the current tide of red ink appears to be more structural in nature, the result of rising entitlement costs and routine overspending.
In fact, the federal government will actually take in more in taxes this year than it did last year, the result of increased economic growth. But those increased revenues are more than offset by $130 billion in higher spending. As a result, the CBO projects that we will return to the era of trillion‐dollar deficits as soon as 2022. Within a decade, the deficit will reach an all‐time high of $1.5 trillion. After that, the red ink will continue to grow for as far as the eye can see.
The CBO now expects the national debt to reach $30 trillion by 2027 and double as a share of the national economy by mid‐century. Debt of such enormous proportions will have very real economic consequences. The CBO estimates the economy will grow 3 percent slower than it would in the absence of the debt, which will lower the average income by $4,000 from what it would be if the debt were held in check.
Moreover, this is likely the good news. If, as will almost certainly happen, Congress simply extends various expiring tax cuts and eliminates sequestration, the debt will rise even higher and faster.
Yet, as we sink deeper and deeper into this ocean of red ink, both congressional Republicans and the Trump administration seem blithely unconcerned. Apparently, Republican concern over the debt ended the moment Barack Obama left office.