CBO: Federal debt and the risk of a fiscal crisis

The graph above (click on the graph for a clearer and larger view) comes from a new Congressional Budget Office report.

The scarier scenario (light blue dotted line labelled "CBO's Alternative Fiscal Scenario") shows the CBO's forecast if the Bush tax cuts are extended. The less scary scenario (dark blue dotted line labelled "CBO's Extended Fiscal Scenario") is the CBO forecast if the Bush tax cuts are allowed to expire.

Hat tip: Thanks to Greg Mankiw for calling my attention to this new CBO report.

Greg was Chair of the President's Council of Economic Advisors at the time the Bush tax cuts were enacted in 2003.

Today's New York Times editorial has more thoughts about the prospect of exploding deficits.