Red Ink Warning: Debt To Hit 62 Percent of GDP

By Alex Pepper

Jun 30, 2010 12:14pm

ABC News’ Matthew Jaffe reports: On the same day President Obama’s fiscal commission meets to figure out ways to reduce the nation’s rising red ink, the non-partisan Congressional Budget Office said the national debt will rise to 62 percent of gross domestic product by year’s end, the highest percentage since just after the end of World War II. By comparison, at the end of 2008 debt was 40 percent of GDP, slightly above the 40-year average of 36 percent. The nation’s deficits and debt have skyrocketed in the wake of the 2008 financial crisis as the government has ratcheted up spending to jumpstart the country out of recession. Last month the national debt soared over the $13 trillion mark, prompting Republicans to charge the Obama administration and the Democratic leadership in Congress with fiscal irresponsibility. Last weekend at the G-20 summit in Canada President Obama urged world leaders to continue spending until it was clear that the crisis was in the rear-view mirror, but with some European nations grappling with severe debt crises, his arguments were not met with consensus approval from his counterparts. “It is vital to the nation’s economic future that we come to agreement on a credible bipartisan plan to put the budget back on a sound long-term fiscal course,” Senate Budget Committee chairman Kent Conrad said in a statement on Wednesday. “We simply cannot allow the federal debt to explode as envisioned under CBO’s projections. The economic security of the country and the quality of life for our children and grandchildren are at stake.” -Matthew Jaffe

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