The nation’s fiscal outlook is stable for the rest of this decade and then worsens gradually, according to our new projections of the budget outlook under current policies through 2040. The projected ratio of debt to gross domestic product (GDP) — which was 72 percent at the end of fiscal year 2013 — will reach 74 percent by 2020 and 101 percent by 2040 (see chart).
The projections are only slightly less favorable than those we published in June 2013 but show a marked improvement over the situation just four years ago, in 2010.
No deficit or debt crisis looms, and the weak labor market remains the nation’s most immediate economic concern. But policymakers and the public should not ignore the long-run budget problems, which remain challenging. Policymakers should address the need both for immediate measures to strengthen the job market and for measures to reduce longer-term deficits, which should take effect when the economy has more fully recovered.
To read the complete report, see here. The projections are also available in a