CBO Projects High, Stable Level of Debt Over 10-Year Horizon

Here’s the takeaway chart from today’s Congressional Budget Office update. The bottom line is that within the 10-year scoring window, the debt:GDP ratio is expected to be basically stable. Whether this is right or not all comes down to the economic forecasts, (CBO seems to think the Fed will let inflation linger well below 2 percent for a while, which may not be the case) and of course to whether Congress does anything else new.

The broader takeaway should be that this is largely meaningless. The noncrazy worry about large projected long-term deficits has nothing to do with deficits and instead is about the fact that buying health care services for all these old people is likely to be very expensive. It happens to be the case that the CBO currently draws the lines so as to make that register as a lot of borrowing, but paying for it with higher taxes wouldn’t be fun either. The question is whether we can find some more efficient ways to get treatment to the elderly. The Affordable Care Act contains some ideas, and hopefully some of them will pan out. But more has to be done.