The Long-Term Budget Outlook

 This I added because of the Fact Check on what was said between the President and Republican Paul Ryan.The whole report by the CBO is about the Fisical Outlook of the country over the long haul.  Unfortunetly I do not understand any of it,.  Way over my head, that's okay, just something I have to do a little studying over to make sense.

 

CBO

The Budget and Economic Outlook:
Fiscal Years 2010 to 2020

January 2010

CBOs Baseline Projections of Federal Debt

The severe economic downturn and nearly unpreceented turmoil in the financial system over the past few years—combined with federal policies implemented in response to those conditions—have caused deficits to climb dramatically. However, even after the economy has recovered and the budgetary costs of associated federal policies have waned, the budget outlook will remain daunting. If tax provisions expire as scheduled and discretionary spending grows at the rate of inflation each year (as assumed in CBO’s baseline), budget deficits averaging almost 3 percent of GDP will persist between 2013 and 2020. Federal debt held by the public will reach 67 percent of GDP by 2020, the largest share since the early 1950s. Moreover, if expiring tax provisions are extended or spending grows faster than is assumed in the baseline, those deficits—and the corresponding debt that will result—may be much larger.
Beyond the 10-year projection period, rising health care costs and the aging of the U.S. population will continue to exacerbate the fiscal challenges facing the nation. Recurring large deficits and the resulting increases in federal debt over time will reduce national saving and investment relative to what would otherwise occur, and the reduced pace of capital accumulation, in turn, will lower the long-term growth of productivity, output, wages, and income.
The single greatest threat to budget stability is the growth of federal spending on health care—pushed up both by increases in the number of beneficiaries of Medicare and Medicaid (because of the aging of the population) and by growth in spending per beneficiary that outstrips growth in per capita GDP. For the nation’s fiscal situation to be sustainable in future decades, growth in such spending will have to be reduced relative to its historical trend and to CBO’s projected path. Today, outlays for Medicaid and Medicare combined (excluding offsetting receipts) equal about 5.5 percent of GDP. Under current law, spending for those two programs is expected to keep growing faster than the economy, reaching 6.6 percent of GDP by 2020 and potentially reaching 10 percent by 2035.¹¹ Without changes to federal fiscal policy—involving some combination of lower spending and higher revenues than the amounts projected under current law—those rising costs will rapidly drive the size of federal debt held by the public well beyond the 67 percent of GDP projected for 2020.