In mid-May, the Congressional Budget Office (CBO) revised its previous estimate of the federal government’s 2013 deficit downward by 24 percent. The fiscal year (which ends on September 30) will feature red ink of merely $642 billion, down from the $1 trillion-plus of the previous four years, according to the CBO. For many Democrats, this proved what they knew all along: The national debt is not a clear and present threat, says Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.
- But after years of bipartisan overspending, public debt today (that’s the money that the federal government owes to domestic and foreign investors) is almost 90 percent higher than at the onset of the financial crisis in 2008.
- Public debt is now 75.1 percent of gross domestic product (GDP), the highest level since 1950, and it is projected to reach 76.2 percent next year.
Assuming current laws, the CBO projects that the debt is scheduled to grow to $19.07 trillion by 2023, or 73.6 percent of projected GDP. To put that number in perspective, in its February report the CBO reminded policymakers that “as recently as the end of 2007, federal debt equaled just 36 percent of GDP.”