CBO on the Federal Debt

Here is the Director of the Congressional Budget Office (CBO) talking about Federal Debt.

Here is the beginning of the Blog Post by Mr Elmendorf:

Federal Debt and the Risk of a Financial Crisis

In fiscal crises in a number of countries around the world, investors have lost confidence in governments’ abilities to manage their budgets, and those governments have lost their ability to borrow at affordable rates.  With U.S. government debt already at a level that is high by historical standards, and the prospect that, under current policies, federal debt would continue to grow, it is possible that interest rates might rise gradually as investors’ confidence in the U.S. government’s finances declined, giving legislators sufficient time to make policy choices that could avert a crisis.  It is also possible, however, that investors would lose confidence abruptly and interest rates on government debt would rise sharply, as evidenced by the experiences of other countries.

Unfortunately, there is no way to predict with any confidence whether and when such a crisis might occur in the United States.

Then follows the link to the CBO report.

Someone once told me that the CBO has a hard time projecting out more than five years in the area of debt and its impact upon the economy.

If you like this report, you should consider creating a bookmark for the CBO Director's blog—and paying your taxes to support him.  It is not like he is paid like he was the City Manager of Bell, California.

Regards  —  Cliff