CBO: We’ll Be Maxed Out in Nine Years

PJ Media » CBO: We’ll Be Maxed Out in Nine Years
Shorter-term, the CBO report’s “Extended Alternative Fiscal Scenario” projects that the federal government will hit what many economists consider the danger-zone level of debt — namely the point at which debt held by the public (excluding intergovernmental holdings) reaches 90% of GDP — sometime during fiscal 2021, the same year as its 2011 projection.

That 90% threshold is what I characterized in a column last year as when the country will become “Maxed Out America,” reaching the point where the federal government will likely either have a hard time issuing additional debt, or will have to start paying higher than risk-free rates to do so, starting a vicious cycle which will be hard to stop once started.