It projects that if current law and policies remain what they are now the economy will grow by 2.2 per cent in real terms this year and by 1.9 per cent in 2011, the unemployment rate will remain elevated this year and next, and inflation will remain subdued.
As to the budget deficit, which was almost 10 per cent of the GDP last year, the CBO expects a small reduction this year to 9.2 per cent of the GDP and next year to 6.5 per cent. The accumulating Federal debt, needless to say, continues to rise, to reach some $16 trillion by the end of 2020 under CBO baseline assumptions.
Needless to say, these are only projections and regarded by many as an overstatement of growth and understatement of the deficits the country faces because many assumptions underlying the projections are seen as optimistic. The CBO, to its credit, includes alternative assessments in its report.
Some snapshots of the economy and its baseline prospects as seen by the CBO:
Budget Outlays and Revenues
The Trend in Actual and Potential GDP
Federal Debt Held by the Public
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