Economy cooling, US like frog in hot water – trouble brewing.

TLDR:

• The Congressional Budget Office projects deficits rising and government debt growing significantly over the next 10 years.
• To address the economic challenges, the US needs broader spending restraint, more revenue, and more workers to support economic growth.

In the article “The economy is cooling but the US is a frog in hot water” by Robert L. Bixby, the author discusses the incremental changes in the US economy that are accumulating to dangerous levels. The Congressional Budget Office’s Budget and Economic Outlook: 2024 to 2034 predicts rising deficits and increasing government debt, stressing the need for immediate action. Bixby highlights three key facts about the current situation that need to be addressed:

• Broader Spending Restraint: Efforts to control spending must extend beyond annual appropriations to mandatory programs like Social Security, Medicare, and Medicaid.
• More Revenue: With an aging population and rising healthcare costs, the US needs to increase revenue to balance the budget, potentially above 19% of GDP.
• More Workers: The slowing potential workforce growth due to aging demographics necessitates increased immigration or other solutions to support economic growth.

Bixby emphasizes the need for difficult tradeoffs and bipartisan cooperation to address these challenges, warning that failure to act could lead to disastrous consequences akin to the allegory of the frog in boiling water. The US must take decisive steps to ensure a sustainable economic future.