Rapidly rising national debt threatens to reduce income growth by one-third: CBO data

Projected national debt growth could reduce income growth by 33% over the next three decades and 42% annually by FY 2049, according to the CBO

Published: May 29, 2024 3:40pm

Updated: May 29, 2024 3:41pm

The rapidly increasing national debt will reduce economic growth and projected wage growth over time, according to a new report from the Congressional Budget Office.

The Committee for a Responsible Federal Budget analyzed the data in the comprehensive report and found that the "debt trajectory" under current law will "reduce income growth by 12% over the next three decades and 13% annually by Fiscal Year (FY) 2049."

Projected national debt increases would reduce income growth even further by 33% over the next three decades and 42% annually by FY 2049, according to the CRFB analysis of CBO data. This amounts to about $14,500 per person in FY 2054.

"Under CBO’s current law baseline, where debt is projected to rise to 166% of GDP by FY 2054, CBO projects income will grow by less than $39,000, to $123,200 per person. In other words, income growth would slow by about 12%," read a CRFB analysis of the data.

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