This week, the Congressional Budget Office (CBO) released its 2019 Long-Term Outlook which corroborated that the United States current rate of spending is unsustainable.

CBO warns the nation’s mounting debt heightens the risk of a fiscal crisis and will slow income growth, place upward pressure on interest rates, and weaken the ability to respond to the next national emergency or recession.

Growing interest from the rising debt, in addition to increased spending in health care and social security, will drive spending from its current rate of 16.5 percent of GDP to 19.5 percent by 2049.

By the end of this year, debt held by the public will total 78 percent of the economy, and the debt will only continue to rise as the population ages.

The Congress needs to fix this situation before it becomes worse.  Lawmakers must cut spending and put the debt on a downward trajectory, curb the growth of health care spending, make Social Security solvent, and further reform the tax code.

CBO’s new report shows that the longer lawmakers wait to make these changes, the more difficult and expensive the solution will become.

However, CBO has given lawmakers an incentive to come to the table: the report projects that lowering the debt could increase the average income by almost $9,000 per person per year, or about 10 percent.  CBO estimates the income per person – also called the Gross National Product (GNP) – would come in around $99,500 in 2049 if the debt is reduced to its historic average, compared to $90,500 if spending is not addressed.

CBO estimates that for every $1 in deficit increase, private domestic investment is reduced by 15 to 50 cents and foreign holdings of American assets are increased by 20 to 25 cents.  Slower economic growth and increased debt purchases abroad will lead to lower wage and income growth here at home.

If Congress fixes the debt, the average American’s income will increase.