The budget outlook in one graphic

at 01:47 PM ET, 06/05/2012

The Congressional Budget Office has released its latest long-term budget outlook. You can read the whole thing here. Want it in one chart? Of course you do:

(Source: CBO)
Remember: The “extended baseline scenario” means we let the Bush tax cuts expire, the spending sequester take effect, etc. The “alternative” scenario means we extend everything.

In the “extended baseline scenario,” which is the one currently written into law, we don’t have a debt problem, but we have much higher taxes and, in the short-term, a likely recession. In the “alternative” scenario, we’ve got a huge debt problem, but lower taxes and less short-term austerity. Here’s more from Lori Montgomery.

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