CBO expects federal debt to double over next 30 years

Thursday, March 4, 2021 | Josh Boak

The Congressional Budget Office estimated Thursday that persistent budget deficits will cause the federal debt to double in size over the next 30 years.

Following the 2008 financial crisis and the pandemic, the government has depended heavily on borrowing and low interest rates to help an ailing economy. But as the economy is expected to heal, the CBO has forecasted that interest rates will rise and spending on programs such as Social Security and Medicare will increase.

The estimates do not include President Joe Biden's proposed $1.9 trillion coronavirus relief package, which would further add to the deficit in hopes of speeding faster growth and hiring.

Excluding Biden's aid plan, the annual budget deficit would be equal to 10.3% of this year's gross domestic product, a measure of the total size of the U.S. economy. The annual deficit as a percentage of GDP would decline over the next decade and then rise in the following decades to reach 13.3% in 2051.

All of that translates into the U.S. government carrying a higher debt load. The CBO said that publicly held debt would equal 102% of this year's GDP. It estimated that the accumulated debt would grow to 202% of GDP by 2051.

Still, there was positive news because the CBO foresees strong economic growth that will lead to higher payroll tax revenues. It estimates that Social Security will exhaust its combined trust funds in calendar year 2032, one year later than it forecasted in September.

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7 Stocks That Cathie Wood is Buying And You Should Too

If you’re an investor that likes to go with the “hot hand,” then they don’t get much hotter than Cathie Wood. The founder and CEO of ARK Investment Management delivered returns of over 100% in all five of her firm’s exchange-traded funds (ETFs) in 2020.

The names of her funds showcase some of the hottest emerging growth trends in the market: financial technology (fintech), genomic revolution, innovation, autonomous technology/robotics, and next generation internet.

As you would expect, these funds contain some of the hottest growth stocks from the past year. And in the aftermath of the tech selloff, Wood is not backing away. In fact, she’s doubling down on her strategy. It might not be exactly a matter of being greedy while others are fearful; perhaps more like being prepared while others are distracted.

But the other thing about Wood’s selections is that many of them are not obscure names. These are companies that were among the hottest names in 2020. Wood simply believes that they still have room to run. And that’s one reason you should consider making them a part of your portfolio.

In this special presentation, we’re giving you just seven of the stocks that Cathie Wood is buying or has bought recently. We’ve attempted to pick out at least one stock from each of the ARK ETFs. As with any investment decision, it’s important that you perform your own research before making a decision.

View the "7 Stocks That Cathie Wood is Buying And You Should Too".


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