Outstanding federal debt is projected to hit $28.2 trillion over the next decade, according to a report from the Congressional Budget Office.
At the end of this year, outstanding federal debt is expected to climb to $19.4 trillion and to rise by $8.8 trillion in the next ten years.
The federal government’s budget deficit, which is the difference between how much money the government spends and how much money it takes in through tax collection, will be $590 billion by the end of 2016, $152 billion more than the previous year.
Government spending is projected to increase by 5 percent, or $178 billion, while government revenue is projected to increase by less than 1 percent, or $26 billion.
The rise in government spending is attributed to a 6 percent increase in outlays for Social Security and Medicare, a 1 percent increase in discretionary spending, and an 11 percent increase in net interest.
“Debt held by the public will amount to nearly 77 percent of GDP by the end of 2016, CBO estimates—3 percentage points higher than last year and its highest ratio since 1950,” the report states. “Three decades from now … debt held by the public is projected to be about twice as high, relative to GDP, as it is this year—which would be higher than the United States has ever recorded.”
The budget office says that rising debt will have serious consequences such as a substantial increase in spending on interest payments, a decrease in the nation’s capital stock, and declining productivity and wages, all of which increase the likelihood of a fiscal crisis.