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Opening Arguments

Closer to the cliff

The headline on this story says "dire" CBO report -- can't we find a stronger word than that?

U.S. debt is on track to be nearly twice the size of the U.S. economy by 2037, the nonpartisan Congressional Budget Office (CBO) warned Tuesday.

The new CBO report states that increased entitlement spending driven by the retirement of the baby boomers and insufficient revenue is making the long-term outlook for the national debt increasingly dire.

[. . .]

Many economists have warned that if debt held by the public approaches 100 percent of GDP, it can bring on the kind of fiscal crisis being felt in European countries today, in which governments must suddenly slash spending and laying off workers in the face of rising interest rates caused by spooked investors. 

But if 100 percent of GDP will bring on a European-style crisis, we'll crash and burn long before we ever get to 200 percent. Whew. Had me worried there for a minute.