A recent report by the United States Congressional Budget Office (CBO) has raised concerns about the possibility of the US government facing financial difficulties and being unable to meet its obligations. The report highlights the risk of the government defaulting on its debt as it approaches the statutory debt limit of $31.4 trillion, which was reached on January 19. If the debt limit is not increased, the CBO predicts that by June, the government may no longer have sufficient funds to pay all of its obligations.
The CBO’s projections for the federal budget deficit indicate that it will reach $1.5 trillion in 2023, which is $100 billion more than the initial estimate in February. The outcome of the ongoing Supreme Court case regarding the cancellation of outstanding student loan debt could also significantly impact the total revenue for 2023. Additionally, a shortfall in tax receipts recorded through April may contribute to a larger deficit than initially anticipated.
Unfortunately, the CBO does not foresee a decrease in the deficit’s growth in the near future. It predicts that annual deficits will nearly double over the next decade, reaching $2.7 trillion in 2033. Consequently, the national debt held by the public is projected to increase from 98% of GDP at the end of this year to 119% at the end of 2033, marking the highest level of US debt ever recorded.
These projections serve as a reminder of the ongoing fiscal challenges faced by the US government and the importance of addressing them to ensure financial stability and sustainability.
