Soaring U.S. Debt Is a Spending Problem

Revenue is stable, but outlays are reaching new heights as a share of GDP.

WSJ editorial. Excerpts:

"this year’s budget deficit will clock in at roughly $2 trillion, some $400 billion more than it forecast in February and $300 billion larger than last year’s deficit. This is unprecedented when the economy is growing and defense spending is nearly flat. The deficit this fiscal year will be 7% of GDP, which is more than during some recessions."

"says deficits will stay nearly this high for years"

"Debt held by the public will grow to 122.4% of GDP in 2034 from 97.3% last year."

"Revenue is expected to total 17.2% of GDP this year—roughly the 50-year average before the pandemic"

"Outlays are now expected to hit 24.2% of GDP this year and average 24% over the next decade."

"spending before the pandemic exceeded 24% only once since World War II—in 2009 amid the financial panic and the Obama-Pelosi “stimulus” binge."

"overall defense spending is still falling as a share of the economy and is expected to hit a postwar low of 2.8% of GDP in 2034."

"Biden’s latest plans for student-loan debt transfer to taxpayers, which CBO estimates could cost $211 billion this year above what it estimated in February. This is on top of the hundreds of billions of dollars in student debt that Mr. Biden has already written down"

"CBO increased its ACA spending estimate by $22 billion for this year and $244 billion over the next decade. It also raised its ACA enrollment projection by four million for this year and an average of three million over the next 10 years."

"the Inflation Reduction Act’s sweetened subsidies and a Biden Administration regulatory change increased eligibility for subsidies."

"The end of the pandemic emergency was expected to cause Medicaid enrollment to plunge."

"Democratic-run states have been slow to remove able-bodied adults who are no longer eligible. CBO has thus increased its forecast for Medicaid spending by $50 billion in 2024 and $314 billion over the next decade."

"Spending on interest is now expected to be $1.02 trillion next year, exceeding $964 billion for defense."

"If spending as a share of GDP remained at the pre-pandemic average, the deficit would be roughly $890 billion this year and $13.4 trillion smaller than CBO’s 10-year projection."