CBO: Cliff Deal Covers 15.4% of the New Debt Added in The Deal

The CBO estimates that the Cliff Deal will raise tax by $620 billion over the next decade. How much is it? Well, because the Deal extends Bush Tax Rates to most Americans, and due to new spending projects and green energy provisions in the bill, the USA will add up $3.9 trillion in new debt over the next decade aside from the $2T that was already expected.

This means that the $620 billion in new tax placed in the deal, will cover about 15.5% of the new $3.9T in debt, or perhaps it will cover less than 11% of the minimum six trillion in new debt that the country will pile on over the next decade.

In other words, the US is now on a path to have $600 billion in annual deficits over the next decade, and it has $62 billion each year to help cover for it. Hmmm. $600 – $62 = $538. This is of course before factoring in that the CBO always over estimates revenue and underestimates outlays.

01/01/2013 8:59 PM by JPUpdates Staff

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