2  BIS Review 22/2010  As troubling as these deficits appear, even more disconcerting is the longer-term outlook for the federal debt caused by the accumulation of these deficits over time. The CBO’s long-term debt projections clearly show that current fiscal policies are unsustainable.
In one scenario, the liftoff point for federal debt – that is, the time when debt starts rising without any sign of stabilizing – occurs shortly after 2020. By 2035, federal debt held by the public reaches 80 percent of GDP – a level only exceeded during and just after World War II.