UNITED STATES: ‘ Debt to GDP Ratio Nearly Exceeds Group of Seven and Going Upward ‘
#AceNewsServices – UNITED STATES – The U.S. debt-to-GDP ratio has nearly grown to the Group of Seven (G7) average, a dramatic increase from 2000 when it was lower than most other G7 countries, according to this new progress report and scorecard from the Council on Foreign Relations Renewing America initiative.
At its current rate, the U.S. debt-to-GDP ratio will be higher than all G7 countries except Japan by 2040.
While other large wealthy countries have been cutting their entitlement programs, the United States has left Medicare and Social Security mostly untouched. Recent U.S. budget cuts have instead focused on discretionary spending, which goes toward areas such as education, infrastructure, and research and development—all of which constitute investments in future economi“
By 2040, public debt is projected to top 110 percent, equal to the highest levels reached during the Second World War,”Renewing America Associate Director Rebecca Strauss writes. “And absent any policy changes it will likely keep climbing after-ward into uncharted territory for the United States.”
Americans will have to make difficult choices to get the public debt load under control. Sequestration, which took effect in 2013, only affected government spending projected to decline as a share of GDP.
Meanwhile, U.S. policy-makers left cutting entitlements or increasing tax revenues largely off the table, despite the fact that entitlements will account for nearly all new federal spending in the future.