An Update to the Budget and Economic Outlook: 2014 to 2024
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. However, later in the coming decade, if current laws governing federal taxes and spending generally remained unchanged, revenues would grow only slightly faster than the economy and spending would increase more rapidly, according to the Congressional Budget Office s CBO s projections. Consequently, relative to the size of the economy, deficits would grow and federal debt would climb. CBO s budget projections are built upon its economic forecast, which anticipates that the economy will grow slowly this year, on balance, and then at a faster but still moderate pace over the next few years. The gap between the nation s output and its potential maximum sustainable output will narrow to its historical average by the end of 2017, CBO expects, largely eliminating the underutilization of labor that currently exists. As the economy strengthens over the next few years, inflation is expected to remain below the Federal Reserve s goal, and interest rates on Treasury securities, which have been exceptionally low since the recession, are projected to rise considerably.
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