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Congressional Budget Office
Presentation to theAssociation of Government Accountants
The Budget and Economic Outlook
February 18, 2011
Robert A. SunshineDeputy Director
2
Real Gross Domestic Product
Trillions of 2005 Dollars, Log Scale
202020152010200520001995199019851980
19
16
13
10
7
0
Actual Projected
PotentialGDP
GDP
3
Recovery in Real Gross Domestic Product and Employment
4
Household Net Worth
Ratio to Disposable Personal Income
2010200019901980197019601950
6.5
6.0
5.5
5.0
4.5
4.0
0
5
Vacant Housing Units
Percentage of Total Units
2010200520001995199019851980197519701965
15
14
13
12
11
10
9
0
Unemployment Rate
Percent
2
Actual Projected
202020152010200520001995199019851980
12
10
8
6
4
2
0
1
Possible Paths to Full Employment
Millions of People
8
People Who Have Lost Their Job
Percentage of All Unemployed People
Inflation
Percentage Change from Previous Year
9
Total Revenues and Outlays
Percentage of GDP
10
1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021
0
14
16
18
20
22
24
26
0
14
16
18
20
22
24
26
Average Outlays,1971 to 2010
Outlays
Average Revenues,1971 to 2010
Actual Projected
Revenues
3
Total Deficits and Surpluses—Historically, in CBO’s Baseline, and with a Continuation of Certain Policies
1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021
-12
-10
-8
-6
-4
-2
0
2
4
-12
-10
-8
-6
-4
-2
0
2
4Actual Projected
Baseline
Continuation ofCertain Policies
Percentage of GDP
12
Comparison of CBO’s and the Administration’s BEA Baseline Deficit Projections
Billions of Dollars
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
CBO Baseline
Administration'sBEA Baseline
Actual Projected
4
Federal Debt Held by the Public—Historically, in CBO’s Baseline, and with a Continuation of Certain Policies
1940 1949 1958 1967 1976 1985 1994 2003 2012 2021
0
20
40
60
80
100
120
0
20
40
60
80
100
120Actual Projected
Baseline
Continuationof CertainPolicies
Percentage of GDP
8
Debt Burden Across Countries in 2009
Source: For the United States, debt held by the public net of financial assets. For other countries, general government debt net of financial liabilities as reported by the Organisation for Economic Co-operation and Development.
Switzerland
Slovak Republic
Poland
Canada
Ireland
Netherlands
Spain
Austria
Iceland
United Kingdom
UNITED STATES
Germany
France
Portugal
Hungary
Belgium
Greece
Italy
Japan
0 20 40 60 80 100 120
2021 CBOBaseline
WithContinuation ofCertain Policies
Percentage of GDP
15
Debt Held by the Public and Net Interest
Billions of Dollars
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0
100
200
300
400
500
600
700
800
900
1,000
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Debt Held by the Public(right axis)
Net Interest(left axis)
Actual Projected
16
Outlays for Some Key Federal Programs Compared with Total Federal Revenues
Percentage of GDP
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0
14
16
18
20
Revenues, with Continuation ofCertain Policies
Outlays for Social Security, Medicare,Medicaid, Other Health Programs,
Defense, and Net Interest
Actual Projected
7
Components of the Federal Budget
1970 20072021
January Baseline
Percentage of GDP
Revenues 19.0 18.5 20.8
Outlays 19.3 19.6 24.0Social Security, Medicare, Medicaid, health insurance subsidies, and other health programs
3.8 8.2 12.0
Defense 8.1 3.9 3.6Other mandatory spending and nondefense discretionary spending
6.0 5.8 5.0
Net interest 1.4 1.7 3.3
Deficit 0.3 1.2 3.2Note: Figures are shown net of offsetting receipts where relevant.
5
Projected Federal Revenue and Spending in 2021
Current Law (Baseline) With Continuation of Certain Policies
19
The Population Ages 65 or Older as a Percentage of the Population Ages 20 to 64
1962 1972 1982 1992 2002 2012 2022 2032 2042 2052 2062 2072
0
10
20
30
40
50Actual Projected
Percent
20
Federal Spending for Medicare and Medicaid and for Social Security
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
0
2
4
6
8
10
12
14
16
18
Medicare, Medicaid, CHIP,and Exchange Subsidies
Social Security
Actual Projected
From CBO’s Long –Term Budget Outlook, June 2010.
Percentage of GDP
21
Federal Debt Under CBO’s Long-Term Budget Scenario
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
0
25
50
75
100
125
150
175
200
Extended-Baseline Scenario
Alternative Fiscal Scenario
Actual Projected
From CBO’s Long –Term Budget Outlook, June 2010.
Percentage of GDP
