(CNSNews.com) - The Congressional Budget Office is projecting that the federal government will not only fail to balance its budget in any year over the next eleven years (fiscal 2019 through 2029), but that during those eleven years it will increase the federal debt held by the public by $13 trillion.
“Under the assumptions that govern the CBO’s baseline, the federal government is projected to borrow another $13.0 trillion from the end of 2018 through 2029,” said the CBO’s “Budget and Economic Outlook: 2019 to 2029” released on Jan. 28.
The CBO outlook said that one of the “consequences of growing debt” is: “The likelihood of a fiscal crisis would increase.”
The total federal debt consists of two elements: the debt held by the public and the intragovernmental debt. The debt held by the public is sold by the Treasury in securities (including Treasury bills, notes and bonds) to entities outside the federal government. The intragovernmental debt is money the Treasury has taken out of government trust funds—such as the Social Security trust fund—and spent on other things.
As of the close of business on Tuesday, the federal debt held by the public was $16,185,653,238,798.50. The intragovernmental debt was $5,855,013,716,281,97.
That made the total debt of the federal government $22,040,666,955,080,47.
At the beginning of fiscal 2019, the total federal debt held by the public was $15.751 trillion. The CBO estimates that by the end of 2029 it will rise to $28.739 trillion.
“Such a high and rising debt would have significant consequences, both for the economy and for the federal budget,” the CBO outlook said.
“As interest rates continue to rise toward more typical levels, federal spending on interest payments would increase substantially,” CBO said.
“Because federal borrowing reduces national saving over time, the nation’s capital stock ultimately would be smaller, and productivity and total wages would be lower than would be the case of the debt was smaller,” CBO said.
“Lawmakers,” the CBO outlook said, “would have less flexibility than otherwise to use tax and spending policies to respond to unexpected changes.”
“The likelihood of a fiscal crisis in the United States would increase,” said the CBO. “Specifically, the risk would rise of investors’ being unwilling to finance the government’s borrowing unless they were compensated with very high interest rates. If that occurred, interest rates on federal debt would rise suddenly and sharply relative to rates of return on other assets.”