ABSTRACT: We provide new projections of the fiscal outlook over 10-year and longer-term horizons, based on the latest government estimates. The outlook has improved recently, but debt remains historically high as a share of GDP and is projected to rise further. While addressing this need not require current spending cuts, and while a financial meltdown due to debt is quite unlikely, the medium- and long-term debt outlook does raise concerns. To re-attain a debt-GDP ratio of 36 percent – the level prevailing in 2007 and the average in 1957-2007 – by 2040 would require policy changes of 3.0 percent of GDP.
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