- The US debt ceiling crisis is "pathetic" considering how high government revenue is, David Rosenberg said.
- Federal revenue grew 21% to $4.9 trillion last year, the largest increase in 50 years, the CBO said.
The debt ceiling crisis is "pathetic," considering that government revenue is near a record high, according to top economist David Rosenberg.
"Pathetic that the US could be facing a debt ceiling crisis as Uncle Sam's revenue stream ballooned to $5tn, almost doubling in the past decade to 19.6% of GDP - a near record-high ratio post-WWII & compared to the 50-year average of just over 17%," he said in a tweet on Friday.
After 1945, the highest level the revenue-to-GDP ratio has been was 19.8% in 2000, according to St. Louis Federal Reserve data.
Federal revenue jumped 21% to $4.9 trillion last year compared to 2021, according to the Congressional Budget Office, the largest increase in government revenue in 50 years.
Though government debt swelled to $31 trillion last year, the ratio of debt to GDP fell to 97% from 98% the previous year, the CBO added.
Interest payments on that debt are expected to be around $395 billion in 2023, per to the Office of Management and Budget, or around 1% of last year's GDP.
That comes as lawmakers continue to spar over how to raise the debt limit, which must go up as soon as early June or else the government will default.
Such a default has never happened before, but is likely to spark a financial crisis, experts say, with Moody's forecasting a recession and 2.6 million job losses if it occurs.
In recent talks, House Speaker Kevin McCarthy rejected a short-term increase of the debt ceiling as he and other Republicans in Congress press for $4.5 trillion in spending cuts as a condition to raise the limit.
President Biden has demanded that no conditions be attached to any increase. He was scheduled to meet with McCarthy and other lawmakers on Friday to discuss a possible solution, but talks have been delayed to next week.