CBO: 'Unsustainable' national debt will be twice the size of the entire economy by 2050

The Congressional Budget Office estimated Monday the national debt will be equivalent to almost 200% of the entire Gross Domestic Product by the year 2050, describing the situation as "unsustainable."

"Even after the effects of the 2020 coronavirus pandemic fade, deficits in coming decades are projected to be large by historical standards. In CBO’s projections, deficits increase from 5 percent of gross domestic product (GDP) in 2030 to 13 percent by 2050 – larger in every year than the average deficit of 3 percent of GDP over the past 50 years," read the CBO's 2020 Long-Term Budget Outlook.

"By the end of 2020, federal debt held by the public is projected to equal 98 percent of GDP. The projected budget deficits would boost federal debt to 104 percent of GDP in 2021, to 107 percent of GDP (the highest amount in the nation’s history) in 2023, and to 195 percent of GDP by 2050," the CBO also reported.

The CBO has projected that the deficit will reach a record $3.3 trillion by the end of this year. The public debt is currently $20.9 trillion and the total debt is approaching $27 trillion.

"If debt as a percentage of GDP rises indefinitely, then debt will become unsustainable because the costs of financing deficits and servicing the debt will consume an ever-growing proportion of the nation’s income," read the CBO's latest report.

"In particular, when the economy is operating close to its potential output, the Federal Reserve in all likelihood will not be able to extensively support government borrowing without increasing expected inflation and causing an erosion of confidence in the U.S. dollar as an international reserve currency," the report also stated.