Congressional Budget Office Director Warns Growth Alone Cannot Control Debt
Phillip Swagel warned that economic growth alone will not stabilize United States debt, requiring lawmakers to make political decisions on spending and tax revenues.
FTMQ Business, written by our newsroom0 views
Congressional Budget Office Director Phillip Swagel said faster economic growth is unlikely to keep United States debt in check, Fortune reported. Gross debt has reached $40 trillion, with publicly held debt standing at 100 percent of gross domestic product. Fortune reported that Swagel spoke during a Minneapolis Fed conference on Thursday. [1]
According to Fortune, Swagel stated that keeping the debt ratio flat would require an unprecedented sustained economic boom. The CBO projects that the debt-to-GDP ratio will rise to 120 percent by 2036. Swagel estimated that annual growth rates of 5 percent to 6 percent are needed to stabilize the debt, which is well above the 3 percent target proposed by Treasury Secretary Scott Bessent. [1]
Fortune reported that stronger economic growth generates higher tax revenue, but it also increases government spending. Higher wages drive up federal outlays for programs indexed to inflation, including Social Security and military pay. Higher interest rates linked to faster growth also raise federal borrowing costs, offseting revenue gains. [1]
Because economic expansion alone cannot solve the fiscal deficit, Swagel stressed that lawmakers must make changes to federal revenues and spending. Fortune reported his statement that those decisions are inherently political choices for policymakers. [1]
In short
- Gross United States debt has reached $40 trillion, according to Fortune.
- The CBO projects the debt-to-GDP ratio will reach 120 percent by 2036.
- Phillip Swagel stated that stabilizing the debt requires 5 percent to 6 percent annual economic growth.
Sources
Every paragraph above points to the numbered items it rests on. Read the originals here.
- [1]CBO chief warns it’s ‘probably not plausible’ that a strong economy alone can steady U.S. debt as 5%-6% growth is needed—more than Bessent’s 3% viewFortune, 2h ago (the report this story comes from)
Our newsroom writes these reports with the help of software, from the 1 sources listed and nothing else, and checks them against those sources. Facts can still be wrong or move on; the originals are the record. Spotted a mistake? Write to daniel@monsterkong.com.
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