In a July 1932 radio address, Franklin Roosevelt said, “Let us have the courage to stop borrowing to meet continuing deficits. Stop the deficits … Any government, like any family, can for a year spend a little more than it earns. But you and I know that a continuation of that habit means the poorhouse.”
That was a surprisingly sound bit of advice from that particular president. However, after Roosevelt was elected, he helped entrench a new culture of spending and deficits in Washington that triumphed over a traditional approach of prudence and restraint in public budgeting. FDR’s fiscal legacy continues to haunt us today.
New projections show a grim fiscal future and crushing debt burdens on young Americans. The chart shows CBO’s “alternative” projection for federal debt as a share of the economy, per CRFB. The projection may be more realistic than CBO’s baseline because it assumes current tax cuts are extended and discretionary spending caps will continue to be breached in coming years.
Without reforms, federal debt held by the public will rise from 78 percent of GDP this year to 105 percent by 2028. That will be triple the level in the early 2000s. Interest on the debt will more than double as a share of GDP from 1.6 percent today to 3.3 percent by 2028.
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