Market Watch: U.S. to Hit Japan-like Levels of Government Debt by 2050, Budget Group Says

June 24, 2020

Article by Jonathan Nicholson in The Wall Street Journal Market Watch

The level of U.S. government red ink is set to explode to more than twice the size of the entire economy in three decades, according to a prominent anti-deficit group.

The Committee for a Responsible Federal Budget, a bipartisan group that focuses on fiscal matters, issued its estimate in a report Wednesday that attempts to update the 10-year projections usually made by the Congressional Budget Office and the White House’s Office of Management and Budget.

The CBO has already estimated the deficit for 2020 will rise to a record, in dollar terms, of $3.7 trillion, with public debt rising to 101% of gross domestic product. The nonpartisan budget scorekeeper for Congress is expected to update its 10-year projections in September.

The CRFB’s estimates hint that update could be grim. While the CBO in March, before the pandemic began to affect the economy deeply, estimated a cumulative shortfall of $14.164 trillion from 2020 through 2030, the group’s estimate projects the deficit to be $19.899 trillion over that period, an increase of $5.735 trillion.

“Though short-term borrowing is necessary to fight the current crisis, deficits are far from costless,” the group said.

The group projected debt to rise to 118% of GDP in ...

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