The economic picture painted by the new Congressional Budget Office forecast is a decade of slow growth and a slightly worsening debt picture. First, the near term projection, via the WSJ:
Federal budget analysts dropped their estimates for US economic growth after another disappointing first quarter, extending a string of downward revisions to initial forecasts that have been a hallmark of the current expansion. … The latest CBO projection expects the U.S. will run a deficit of $426 billion, or 2.4% of GDP, the lowest since 2007. That is down from $483 billion, or 2.8% of GDP, last year. … The budget office now expects the unemployment rate to fall to 5.2% in the fourth quarter this year and to 5% in the fourth quarter of 2017. Previously, it saw the unemployment rate declining to 5.5% in 2015 and 5.3% in 2017. … Inflation is also projected to be slightly lower. The CBO forecasts that the core consumer-price index, which excludes food and energy, will rise 1.8% this year, down from an earlier forecast of 2%. … On the whole, lower interest costs for the U.S. government will reduce projected deficits over the coming decade by $200 billion compared with its March projection. In other words, the U.S. would add $7 trillion in debt over the next decade, down from $7.2 trillion in the last forecast. Debt held by the public would rise from 74% of GDP this year to around 77% in 2025.
And a couple more charts (all the charts in this post are from the CBO report) give a longer term perspective:
Of course the assumption here is that policy trends remain the same. Probably not a bad assumption.
from AEI » Latest Content http://ift.tt/1PQ7BK5
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