Have the Debt and Deficits Gotten Better?
Last Updated August 3, 2016
CNN’s Jake Tapper recently provided an informative look at the nation’s debt and deficit outlook, and how it’s perceived by voters. As he points out in the segment below, part of the problem when discussing America’s long-term debt is that it is often confused with short-term deficits.
Fact checking debt at the #DNC https://t.co/QwTNOFD0C4 #TheLead
— Jake Tapper (@jaketapper) July 29, 2016
Deficits, the annual shortfall in the federal budget, had been declining sharply since the Great Recession in 2009. Earlier this year, however, the nonpartisan Congressional Budget Office warned that the era of declining deficits was over, largely due to the passage of tax extenders at the end of 2015.
But much more important is the steep upward trajectory of our long-term debt — which remains as dangerous as ever. In its latest long-term outlook, released in June, CBO projected that the federal debt will climb to 141 percent of GDP by 2046 — by far the highest level on record.
For more clarification on the difference between the debt and the deficit, read "Debt vs. Deficits: What's the Difference?"
Further Reading
President’s Budget Would Reduce Deficits by Raising Taxes on the Wealthy and Corporations
While this budget would be a step in the right direction, it does not adequately address the underlying structural imbalance that defines our fiscal outlook.
Moody’s Lowers U.S. Credit Rating to Negative, Citing Large Federal Deficits
On November 10, 2023, Moody’s Investors Service lowered its outlook on the United States’ credit rating from “stable” to “negative.”
What the Fitch Downgrade Says about our Fiscal Challenges
Fitch Ratings recently downgraded the U.S. long-term credit rating from its top mark of AAA to AA+.