Senate Budget Chairman: ‘We Can Handle’ Current Level of Debt But Long-Term Trajectory ‘Unsustainable'
January 27, 2010 - 4:16 PMSenate Budget Committee Chairman Kent Conrad (D-N.D.) in reference to the latest economic forecast by the Congressional Budget Office [CBO] said "we can handle" the current level of debt.
According to the CBO's most recent report on the budget and economic outlook for fiscal years 2010 to 2020 that was released yesterday, the U.S. public was $7.5 trillion in debt by the end of 2009, and that is expected to more than double to approximately $15 trillion by the end of 2020.
"At the end of 2009, debt held by the public was $7.5 trillion, or 53 percent of GDP; by the end of 2020, debt is projected to climb to $15 trillion, or 67 percent of GDP," the CBO reported.
During a press conference aimed at discussing the CBO budget and economic forecasts, Conrad indicated that although the current level of debt is close to unprecedented, it is manageable.
“Already the gross debt of the United States is reaching near historic levels,” explained Conrad. “We are not there yet.
“We can handle this level of debt. In fact, this is substantially a lower level of debt than Japan has today,” Conrad added. “Their debt is approaching 190 percent of GDP, but what is most troubling and our greatest concern is our long-term trajectory.”
The budget committee chairman went on to explain that the status quo is unacceptable and could result in the economy reaching debt levels of 400 percent of GDP.
In the long-term, “if we stay on the course we’re on, it is completely and totally unsustainable - the debt that will approach 400 percent of the Gross Domestic Product of the United States,” Conrad said.
According to the CBO’s budget and economic outlook report, the U.S. will have to borrow approximately $6 trillion over the next decade to make up for the difference between the approximately $9 trillion debt level expected by the end of 2010 and the $15 trillion debt that the public is predicted to hold by the end of 2020.