File: For future reference,
Brad Delong is now promoting CBO projections that go out 15 years:
That is all.
This is all you need to know from the CBO report, The CBO writes:
Projecting future interest rates on government debt is difficult because those rates have varied considerably over time[...] Interest rates could be higher or lower than CBO projects, for various reasons [...]such as changes in the rate of national saving or in inflows of foreign capital—could also affect the rate of return on capital and therefore interest rates. Or an unexpected surge in inflation could lead to lower real interest rates.
One significant source of budgetary uncertainty is the future growth of federal spending on health care. The federal government pays for health care through Medicare, Medicaid, and other programs, and through tax preferences, especially the exclusion of employersponsored health insurance from income and payroll taxes. The federal government’s health care spending will grow considerably in 2014 because of changes made by the Affordable Care Act: More low-income people will become eligible for Medicaid, and others will become eligible for subsidies for health insurance purchased through exchanges.
Bottom line: The CBO doesn't appear to take its forecasts as seriously as DeLong does.