The CBO’s new report on the long-term budget outlook is gloomy reading. Something has to give, is the message. CBO director Douglas Elmendorf summed it up this way in a recent presentation at the NY Fed:

Given the aging of the population and the rising cost of healthcare, the United States cannot achieve all of the following objectives in the future:

• Keep federal revenues at their average share of GDP during the past 40 years.
• Provide the same sorts of benefits for older Americans that we have provided in the past 40 years.
• Operate the rest of the federal government in line with its role in the economy and society during the past 40 years.