Rising national debt to reduce Americans' income growth: report
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The fast-growing national debt is on pace to reduce the growth in American households' incomes in the decades ahead if the debt isn't stabilized, according to a new report.
An analysis by the nonpartisan Congressional Budget Office (CBO) found the rising national debt will slow economic growth and suppress the growth of Americans' household income over time. It looked at scenarios with the size of the national debt held by the public stable at 99% of gross domestic product and the CBO's baseline under current law and a scenario in which debt would rise more rapidly.
The CBO estimated that gross national product (GNP) per person, a measure of average income, is about $84,400 this year. If the debt is stable relative to the size of the economy at 99%, CBO projected average income will grow by over $44,000 when adjusted for inflation to $128,600 in fiscal year 2054.
By contrast, the CBO's current law baseline has debt held by the public rising to 166% of GDP by fiscal year 2054, which would slow income growth by about 12% to about $123,200 per person. In the additional debt scenario that reflects higher spending levels and less tax revenue due to tax cuts, debt will rise to 294% of GDP by fiscal 2054. And the nonpartisan Committee for a Responsible Federal Budget (CRFB) estimated that would cause income growth to slow by about one-third to $114,100 at that time.
NATIONAL DEBT TRACKER: AMERICAN TAXPAYERS (YOU) ARE NOW ON THE HOOK FOR $34,606,167,915,025.93 AS OF 5/29/24
The rising national debt could slow the growth in Americans' incomes by
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