Entitlement-Driven Long-Term Budget Substantially Worse Than Previously Projected

Here's a Heritage Foundation study on the long run implications of entitlement spending:

Unless lawmakers reform these programs, they will have to fund their costs by:

1.
Raising taxes every year until federal taxes are 57 percent ($11,000 per house­hold, adjusted into today’s economy) above the current levels;
2.
Eventually eliminating every other federal program, including spending on defense, edu­cation, anti-poverty programs, and veterans benefits, by 2045; or
3.
Running massive budget deficits (the status quo option). This is the most expensive option because it would cause the federal debt to increase from the current level of 40 percent of GDP to 500 percent of GDP. Beginning in 2025, just a small interest rate response would push federal spending to 44 percent of GDP by 2040 and 73 percent by 2050—levels twice as high as previous projections.

Of course before then, the credit markets will drive interest rates much higher.A good rule of thumb is when interest on the national debt becomes 30% of the total budget, crisis will occur.We might get to the point where those holding the debt become the de facto owners of the Unites States federal government.The federal government may have to sell all that land it owns.