Can the AI boom fix the US budget problem?
SPY•A Committee for a Responsible Federal Budget note projects US debt will rise from 100% of GDP today to 122% by 2036, with deficits reaching 6.9% of GDP. It says sustained annual growth of 4.4% would be needed to reduce deficits to 3% of GDP by 2036, while growth above 3% would likely be unprecedented.
1. Debt and growth projections
The Committee for a Responsible Federal Budget projects that under current law, US debt will rise from 100% of GDP today to 122% by 2036, while deficits grow to 6.9% of GDP. It estimates sustained annual growth of 3.3% would be needed to hold debt at 100% of GDP, 4.4% to reduce deficits to 3% of GDP by 2036, and 7.2% to balance the budget.
2. AI growth potential
The group said sustained real growth above 3% is possible given artificial intelligence’s potential, but would likely be unprecedented. It said past periods of 3% growth were driven largely by favorable demographics and more women entering the workforce, factors it said could not be replicated amid the current ageing population.
