Chart of the Week: U.S. Federal Debt and the Fiscal Cliff
In just a little over a decade, the U.S. federal debt will exceed 100 percent of gross domestic product (GDP), an “economically damaging” level, according to analysis from The Heritage Foundation based on numbers provided by the U.S. Office of Management and Budget and the Congressional Budget Office.
To the numbers:
Fiscal year (FY) 2012 closed on September 30 with the Congressional Budget Office (CBO) estimating spending of $3.5 trillion and a deficit of $1.1 trillion. Debt held by the public was $11.3 trillion (73 percent of GDP). According to the CBO, debt will explode to 199 percent of GDP by 2037, driven by growth in spending that will reach 36 percent of GDP.
The Heritage Foundation’s Saving the American Dream plan would avert the debt crisis by focusing on reducing and restructuring the spending driving the rapidly increasing need for additional debt over the long term.