Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
Upside of Inequality Oxford Unintended Consequences

AI Summary. The Congressional Budget Office projects the federal budget deficit will reach 8.5% of gross domestic product over a 30-year horizon, with outlays rising to 27.3% of GDP and revenues to 18.8%. The projected growth is attributed to rising interest costs, large sustained deficits excluding interest, and spending on federal health care programs, particularly Medicare.

CBO Staff Congressional Budget Office
Date Posted:

.@USCBO new budget outlook forecasts that federal outlays will reach 27.3% of GDP by 2054 vs.revenues of 18.8%. From 1974 to 2023 mean outlays were 21% of GDP.

How large will the federal deficit grow over 30 years?

Core argument: CBO projects the total federal budget deficit will reach 8.5% of GDP in 2054, a level exceeded since the Great Depression only during and shortly after World War II, the 2007–2009 financial crisis, and the coronavirus pandemic.

In CBO’s projections, the total federal budget deficit increases significantly in relation to gross domestic product over the next 30 years, reaching 8.5% of GDP in 2054. Since the Great Depression, that level has been exceeded only during and shortly after World War II and during the 2007–2009 financial crisis and the coronavirus pandemic. That growth results from rising interest costs and large and sustained primary deficits, which exclude net outlays for interest. Those deficits average 2.2% of GDP over the 30-year period; over the past 50 years, they averaged 1.6% of GDP. Projected primary deficits are especially large given the forecast of low unemployment rates. Measured as a percentage of GDP, federal outlays are large by historical standards and, beginning in 2028, increase in each year, reaching 27.3% of GDP in 2054. Growth in net interest costs and in spending for federal health care programs, particularly Medicare, drives those increases. Revenues, also measured as a percentage of GDP, fluctuate over the next decade and increase thereafter, reaching 18.8% of GDP in 2054.

Takeaways by Macro Roundup® AI

  1. CBO projects the total federal budget deficit will reach 8.5% of GDP in 2054, a level exceeded since the Great Depression only during and shortly after World War II, the 2007–2009 financial crisis, and the coronavirus pandemic.
  2. CBO projects primary deficits, which exclude net outlays for interest, will average 2.2% of GDP over the 30-year period, above the 1.6% average of the past 50 years, and are especially large given the forecast of low unemployment rates.
  3. CBO projects federal outlays will increase in each year beginning in 2028, reaching 27.3% of GDP in 2054, driven by growth in net interest costs and federal health care spending, particularly Medicare, while revenues reach 18.8% of GDP.

Related Articles:

  • Monthly Budget Review: August 2023 — The Congressional Budget Office estimates the federal budget deficit reached $1.5tn over the first 11 months of the fiscal year, $0.6tn more than the same period a year earlier, with revenues 10% lower and outlays 3% higher. Net interest costs on the public debt rose $149bn, or 30%, which the agency attributes mainly to significantly higher interest rates.
  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.
  • Did the U.S. Really Grow Out of Its World War II Debt? — Decomposing U.S. debt-to-GDP movements, the authors find the post-World War II decline from 106% to a trough of 23% was explained mostly by primary budget surpluses and interest-rate distortions from surprise inflation and pegged nominal rates; absent those, the ratio would have fallen only to 74%.
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