The Long-Term Budget Outlook Under Alternative Scenarios for Fiscal Policy

Source: Congressional Budget Office, August 8, 2018

From the summary:
Each year, CBO publishes extended baseline projections—a set of budget projections that incorporate the assumption that current laws generally remain unchanged, extending the agency’s 10-year baseline projections beyond the coming decade. In CBO’s most recent extended baseline, revenues grow more rapidly than gross domestic product (GDP), rising to levels well above their historical average, because recently enacted tax changes are scheduled to expire and because of the structure of the tax system. In addition, discretionary spending falls substantially in relation to the size of the economy. Nevertheless, federal debt held by the public rises from an amount equal to 78 percent of GDP in 2018 to 118 percent of GDP in 2038. This report expands on CBO’s extended baseline projections by showing how the federal budget and the nation’s economy would evolve under three alternative scenarios. In those scenarios, laws would be changed to continue certain policies now in place, leading to even higher debt.