The top numbers cruncher for Congress warned Thursday that the federal government increasingly risks sending the country into a “fiscal crisis,” projecting that unless cuts are made, within a decade the national debt could reach nearly 100 percent of all annual economic activity.
That’s like having $50,000 in debt on a $50,000-a-year salary.
Congressional Budget Office Director Douglas Elmendorf, on the heels of a report pegging the 2011 budget deficit at a record $1.5 trillion, testified before the Senate Budget Committee on the risks of inaction. He said cumulative deficits over the next 10 years could run anywhere from $7 trillion to $12 trillion.
He warned that making budget cuts too deep, too fast could be “disruptive” to the economic recovery at a fragile time. But he said Congress will have to start balancing the budget soon if it wants to head off, or at least minimize, the chance of a national debt-driven fiscal calamity in the future.
“The longer that you wait to make those policy changes … the greater the negative consequences (of the national debt) will be,” he said.