The Congressional Budget Office released an estimate that states if President Barack Obama's 2011 budget is approved by Congress then the United States will see an extra $10 trillion added onto the national debt in ten years.
At the present time, the United States faces a $12.5 trillion national debt, $1.4 trillion national deficit, $1 trillion trade deficit and $107 trillion in unfunded liabilities and expenditures.
According to a recently released Congressional Budget Office report, if the President’s 2011 budget is implemented then the U.S. federal government would add approximately $9.8 trillion to the national debt, reports CNN Money. More than half of the $9.8 trillion would be interest alone.
The CBO, which believes American debt would be $20.3 trillion, or 90 per cent of the Gross Domestic Product, in 2020, says there are two major contributing factors to the debt: 1) the President’s proposal to extend the 2001 and 2003 tax cuts for the majority of Americans. 2) A proposal to protect middle income families from paying the Alternative Minimum Tax (AMT). Those two proposals are estimated to cost $3.8 trillion between 2011 and 2020.
The Associated Press reports that the latest analysis by the CBO foresees debt held by foreign investors, including China, would skyrocket from $7.5 trillion to $20.3 trillion in 2020, which would force interest payments to quadruple to $916 billion by the end of that timeframe.
"While the president is intent on ramming through Congress a new trillion-dollar health-care entitlement, he appears far less concerned with addressing the looming crisis of entitlement spending already on the books. Instead, he delegates this task to a 'Fiscal Commission' — which would not even report until after the next election,” said Republican Congressman of Wisconsin Paul Ryan.
Nevertheless, Pres. Obama, who inherited a disastrous situation from former President George W. Bush, has promised to slash the national deficit by half by 2013 to $727 billion. However, Economists believe, notes AFP, that the deficit is unsustainable and will erode the nation’s standard of living.