 | CBO: Obama's Spending to push Public Debt above $20 Trillion by 2021Scotty Starnes | March 23, 2011 at 11:07 AM | Tags: CBO, Congressional Budget Office, deficits, GDP, national debt, President Obama, public debt | Categories: Political Issues | URL: http://wp.me/pvnFC-4Pv |
Debt is Obama's hope and change.
(CNSNews.com) – The Congressional Budget Office (CBO) says that President Barack Obama's 2012 budget will cause large and persistent yearly deficits that will push the public debt to $20.8 trillion by 2021.
"Federal debt held by the public would double under the President's budget, growing from $10.4 trillion (69 percent of GDP) at the end of 2011 to $20.8 trillion (87 percent of GDP) at the end of 2021," the CBO said in its March 18 analysis of Obama's 2012 budget.
This means that the debt incurred as a result of Obama's planned decade of deficit spending would be worth 87 percent of the value of all the goods and services produced by the economy, the Gross Domestic Product (GDP).
This figure, known as the debt-to-GDP ratio, is used to illustrate the size of a country's debt relative to its economy in order to show how stable a country's finances are.
$20.8 trillion is also more than double the size of the current level of public debt, which is $9.6 trillion. It is also 1.4 times as large as the economy is today.
In a December 2010 issue brief, the CBO said that allowing the national debt to continue on its current path, as Obama's budget does, would lead to less savings and investment because investors would buy more government debt.
"A growing portion of people's savings would go toward purchasing government debt rather than toward investing in productive capital goods, such as factories and computers," CBO explained.
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