President Barack Obama’s budget proposal would create bigger deficits than advertised every year of the next decade, with the shortfalls totaling $1.2 trillion more than the administration projected, according to the Congressional Budget Office.
The nonpartisan agency said yesterday the deficit will remain above 4 per cent of the nation’s gross domestic product for the foreseeable future while the publicly held debt will zoom to $20.3 trillion, amounting to 90 per cent of GDP by 2020. By then, interest payments on the debt will have quadrupled to more than $900 billion annually, the report said. Deficits between 2011 and 2020 would total $9.76 trillion, the CBO said.
Economists generally consider deficits topping 3 per cent of GDP to be unsustainable because that means government debt is growing faster than the ability to pay back the money.
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