The CBO reported that the U.S. is headed for a debt-to-GDP ratio of over 100% unless we raise taxes substantially, make significant cuts or do a combination of both. This debt-to-GDP ratio is at 74%, a level not seen since WWII and it cannot be sustained.
The United States is being left open to a fiscal crisis at any time.
Testifying in the U.S Senate yesterday, Congressional Budget Office Director Keith Hall warned that the publicly held debt of the U.S. government, measured as a percentage of Gross Domestic Product, is headed toward a level the United States has seen only once in its history—at the end of World War II.
Before 2040, the U.S. will be at 101% which means we will be paying off interest and unable to put a dent in the debt by that time. We can’t keep kicking this can down the road without leaving a disastrous legacy to our children and children’s children.
From the CBO report in June:
The long-term outlook for the federal budget has changed little since last year, according to CBO’s projections. If current laws remained generally unchanged in the future, federal debt held by the public would decline slightly relative to the economy’s annual output, or gross domestic product (GDP), over the next few years, CBO projects. After that, however, growing budget deficits—caused mainly by the aging of the population and rising health care costs—would push debt back to, and then above, its current high level. The deficit would grow from less than 3 percent of GDP this year to more than 6 percent in 2040. At that point, 25 years from now, federal debt held by the public would exceed 100 percent of GDP. (Federal debt is now equivalent to about 74 percent of GDP, a higher percentage than at any point in U.S. history except a seven-year period around World War II.)
A January 2015 CBO report noted that the total federal debt will reach $22.3 trillion by 2020. Unsustainable, says the CBO — especially when now-low interest rates return to normal. By 2020, the deficit will nearly double, as federal spending reaches a staggering $4.8 trillion.
Graphs from the June 16, 2015 CBO report. Unless Obamacare is replaced, repealing it alone would increase the national debt.