Back in May 2009 I wrote “Exploding Debt Threatens America” in the Financial Times. Unfortunately the federal debt is still exploding, but fortunately we are learning more about the threat thanks to research reported and carefully explained in a new piece by my colleague Michael Boskin.

The following chart is a quick summary of his amazing findings. It shows the enormous decline in American income (measured by GNP) if fiscal policy follows the path we are now on as estimated by the Congressional Budget Office. The stars represent several different estimates for the year 2040 reported in Michael’s paper. The ranges show CBO estimates under current policy or under the House Budget resolution of last spring.