The Congressional Budget Office (CBO) today released a ten-year budget baseline showing $7 trillion in deficits over the next decade. Yet because Congress requires the CBO to include all sorts of unrealistic assumptions (that all tax cuts will expire, that the AMT will never again be patched, that discretionary spending will barely move for a decade), some adjustments must be made.
This more realistic “current-policy” budget baseline reveals a ten-year deficit of $13 trillion. The annual budget deficit never falls below $1 trillion, and reaches $1.9 trillion by 2021. At that point, the $25 trillion debt would exceed the size of the entire economy – and even that assumes a return to peace and prosperity.