The document discusses the growing gap between government spending and revenue in the United States and the looming debt crisis this will cause. It notes that if current trends continue, debt will reach 146% of GDP by 2030, up from 62% today. Charts show spending growing much faster than revenue, with mandatory spending on programs like Medicare and Social Security being the main driver. The document argues that Washington's spending far exceeds what taxpayers can afford and that difficult decisions are needed to bring spending in line with historical averages.
1. Ignored Crisis: A Looming Wave of Debt
160
2030: 146%
140
120
Debt as a % of GDP
100
80
Today: 62%
60
40
20
0
1960 1970 1980 1990 2000 2010 2020 2030
Sources: Office of Management and Budget Historical Tables, Congressional Budget Office Alternative Fiscal Scenario
18
2. Widening Gap Between Spending and Revenue
28.0
26.0
24.0
2020
Gap:
22.0
$1.25
% of GDP
20.0 Trillion
18.0
16.0
14.0
Revenue
12.0 Spending
1960 1970 1980 1990 2000 2010 2020
Sources: OMB Historical Tables (1940‐2009), Congressional Budget Office's Long‐Term Budget Outlook Alternative Fiscal Scenario
17
6. 2035 Spending
Interest Mandatory Spending
Payments: (Medicare, Medicaid,
$2.27 Trillion Social Security):
$4.46 Trillion
25%
49%
26%
Discretionary Spending
(Defense, Highways,
Education): $2.43 Trillion In Current Dollars
Source: Congressional Budget Office, Alternative Fiscal Scenario
13
7. Debt Isn’t Free:
Putting 2009 Costs Into Perspective
200
187
180
160
Billions of $
140
120
100
80 69
60 49 45 44
40 30
20 12
0
Net Interest Dept of Dept of Dept of Dept of TN State Dept of Labor
Transportation Homeland Education Housing Budget
Security
Sources: President’s FY’11 Budget, CBO, TN 2010‐11 Budget 12
8. Debt Isn’t Free:
Putting 2020 Costs Into Perspective
1000
916
900
800
Billions of $
700
600
500
400
300
200
83 59 54 52
100 35 14
0
Net Interest Dept of Dept of Dept of Dept of Housing TN State Budget Dept of Labor
Transportation Homeland Education
Sources: President’s FY’11 Budget, CBO, TN 2010‐11 Budget
Security
Sources: President’s FY’11 Budget, CBO, TN 2010‐11 Budget 11
9. Who Owned America’s Debt in 1960?
Total Publicly Held Debt: $236.8 Billion
Foreign
Holders:
$13 Billion
(5%)
Domestic
Holders:
$223.8 billion
(95%)
Source: OMB and Department of the Treasury
10
13. What is Right Amount of
Spending?
21% of GDP: Erskine Bowles
20.3% of GDP: 50-year Average
18% of GDP: Balanced Budget
6
14. Getting Spending Back to a Balanced Budget:
$6.7 Trillion Reduction in Spending Over Ten Years
28.0
26.0
24.0
Tough
% of GDP
22.0
Medicine:
20.0 $6.7
18.0 Trillion
16.0
Revenues as % of GDP
14.0
Outlays as % of GDP
12.0
1960 1970 1980 1990 2000 2010 2020
Getting to 21% of GDP would be $3.4 Trillion
Getting to 20.3% of GDP would be $4.5 Trillion
5