Noah Smith, Columnist

U.S. Is Heading to a Future of Zero Interest Rates Forever

It’s the obvious way to avert national bankruptcy as the country keeps piling on debt.

June 27, 2019 at 11:00 AM UTC

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

Stuck there.
Photographer: Leon Neal/AFP/Getty Images

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The Congressional Budget Office has just released its projections for the U.S. federal budget during the next 30 years. The picture is one of steadily rising deficits. Federal government borrowing now amounts to about 4.2% of gross domestic product each year. By 2049, the CBO predicts, that will more than double, to 8.7%:

Only a small portion of these deficits will be due to tax cuts; the CBO projection expects that individual income taxes rise substantially as a share of GDP. Nor will it be due to government profligacy; CBO predicts that discretionary spending will shrink substantially relative to the size of the economy.