Moments ago, CRFB published a new 6-page paper summarizing CBO’s latest Budget and Economic Outlook. Under its current law baseline, CBO estimates that federal debt held by the public will reach 74 percent of GDP by the end of 2014 – a post-war record and more than twice the level at the end of 2007. Debt will fall slightly to below 73 percent by 2018 but, beyond that, CBO’s forecasts show that debt levels will resume their upward trend, reaching 77.2 percent of GDP in 2024.
Our paper also shows how the projections have changed since CBO's last update in April. Deficits are about $400 billion lower through 2024, and debt will be about one percentage point of GDP lower in 2024 than previously expected (77.2 percent versus 78 percent). Much of this drop is due to lower interest rates, which reduce the federal government's interest burden by $465 billion.