The Washington Post today discussed White House’s latest budget update with a pessimistic tone despite the White House’s occupant being Barack Obama. That’s when you know it’s bad.
The article noted that while a report from earlier this year projected that the public debt would fall, the revision from the Office of Budget and Management “sees public debt stuck at 74.6 percent in 2025.” The piece went on to say that this level of debt “is well above historical norms for the U.S. economy.”
It leaves the United States a narrower “fiscal space” to help cope with another recession, war or other emergency. And it represents the uncomfortably high base from which debt is expected to rise even more in the years after 2025, according to the Congressional Budget Office and other experts.
The reason for the persistence of such high debt: “the lack of fundamental reform to U.S. entitlement programs such as Medicare and Social Security.” WaPo even goes on to criticize Obama for his avoidance of the issue.
The problem is compounded by another OMB revision. Originally, reports projected 3 percent in 2015. The new report projects a more anemic 2 percent.
The piece concludes with an uncharacteristically conservative point:
The candidates to succeed Mr. Obama have been touting their economic growth plans as formulas for full employment and higher wages. The latest data remind them, and us, that growth is crucial to fiscal stability, too.