U.S. Debt Could Reach 125% Of GDP In 2032

Debt could rise much higher if policymakers extend several costly temporary policies and take on several other deficit-increasing policies in the near term.

Photo Insert: The Committee for a Responsible Federal Budget recently said that the US debt in 2032 could reach 125 percent of its gross domestic product (GDP).

The Committee for a Responsible Federal Budget said on Tuesday (Wednesday, June 2, 2022, in Manila) that the US debt in 2032 could reach 125 percent of its gross domestic product (GDP) and interest payments could grow to as high as 3.6 percent of the GDP with "irresponsible actions," teleSUR reported.

The Congressional Budget Office's (CBO) recent budget projections found that the US debt will reach a record 110 percent of GDP ($40.2 trillion) by the end of 2032, while the deficit will reach 6.1 percent of GDP ($2.3 trillion) and interest costs will reach 3.3 percent of GDP ($1.2 trillion).

"These current law projections may prove optimistic, however, since they assume policymakers will allow a number of temporary policies to expire, only grow discretionary spending with inflation, and won't pass any new deficit-financed legislation," the budget group said in an analysis.

According to the “Budget and Economic Outlook: 2022 to 2032” released last week, the CBO's current law baseline assumes the Trump-era individual tax cuts in the Tax Cuts and Jobs Act expire at the end of calendar year 2025.

If the tax cuts are extended "permanently" and discretionary spending grows with GDP, deficits through 2032 would be $3.1 trillion higher and debt would reach a record 118 percent of GDP by 2032.

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