Long-Term Budget Outlook: Anyone Still Laughing At Greece?

The updated Long-Term Budget Outlook from the Congressional Budget Office (CBO) is out.

What a surprise, the previously optimistic forecasts by the US administration do not appear to come to fruition.

The CBO is hedging their bets now with what they call an “alternative fiscal scenario”.

The budget outlook is much bleaker under the alternative fiscal scenario. Debt as a share of GDP would exceed its historical peak of 109 per cent by 2025 and would reach 185 per cent in 2035.

A very gloomy picture is starting to emerge, looking at the projections.

Long Term Budget Outlook

Source: Congressional Budget Office

We are not quite there yet, the current numbers are still somewhat better than other debt-ridden economies.

  USA   Greece  External debt (as % of GDP): 96.5%
  Gross external debt: $13.77 trillion (2009 Q3)
  2009 GDP (est): $14.26 trillion

  External debt (as % of GDP): 170.5%
  Gross external debt: $581.68 billion
  2009 GDP (est): $341 billion

Source: http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations

However, given the projections under the “alternative scenario”, should anyone still be laughing at Greece?

As I mentioned a few backs back, we should heed the wake up call from Greece.

Good luck and good investing!

This guest post previous appeared at FXIS Market Strategies >

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