Ignored Crisis: A Looming Wave of Debt Sources: Office of Management and Budget Historical Tables, Congressional Budget Office Alternative Fiscal Scenario Debt as a % of GDP 18 0 20 40 60 80 100 120 140 160 1960 1970 1980 1990 2000 2010 2020 2030 2030: 146% Today: 62%
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Ignored Crisis: A Looming Wave of Debt
Sources: Office of Management and Budget Historical Tables, Congressional Budget Office Alternative Fiscal Scenario
Deb
t as a % of G
DP
18
0
20
40
60
80
100
120
140
160
1960 1970 1980 1990 2000 2010 2020 2030
2030: 146%
Today: 62%
Widening Gap Between Spending and Revenue
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
28.0
1960 1970 1980 1990 2000 2010 2020
Revenue
Spending
2020 Gap: $1.25 Trillion
Sources: OMB Historical Tables (1940‐2009), Congressional Budget Office's Long‐Term Budget Outlook Alternative Fiscal Scenario
% of G
DP
17
Washington “Budgeting”
• In 2008, average TN household earned $43,000
• Using Washington logic, they would spend $74,000
• That’s $31,000more than they earn
• Must borrow 40 cents for every dollar they spend
16
1970 Spending
31%
62%
7%
Discretionary Spending (Defense, Highways,
Education): $558 billion
Interest Payments:$63 billion
Mandatory Spending (Medicare, Medicaid,
Social Security): $279 billion
In Current Dollars
Source: Congressional Budget Office15
2010 Spending
42%52%
6%
Interest Payments:$209 Billion
Discretionary Spending (Defense, Highways,
Education): $1.38 Trillion
Mandatory Spending (Medicare, Medicaid,
Social Security): $2.03 Trillion
Source: Congressional Budget Office14
2035 Spending
49%
26%
25%
Interest Payments:
$2.27 Trillion
Discretionary Spending (Defense, Highways,
Education): $2.43 Trillion
Mandatory Spending (Medicare, Medicaid,
Social Security): $4.46 Trillion
Source: Congressional Budget Office, Alternative Fiscal Scenario
In Current Dollars
13
187
6949 45 44
3012
0
20
40
60
80
100
120
140
160
180
200
Net Interest Dept of Transportation
Dept of Homeland Security
Dept of Education
Dept of Housing
TN State Budget
Dept of Labor
Billion
s of $
Debt Isn’t Free:Putting 2009 Costs Into Perspective