When Obama took office in 2009 and racked up trillion-dollar deficits, it shocked the nation and spawned the Tea Party movement to push reductions in spending. Thanks to passage of the Budget Control Act under a GOP Congress, deficits declined to roughly $400-$600 billion during Obama’s second term in office.

Fast-forward to the new decade, and despite high revenue and record low unemployment, annual deficits will forever remain above $1 trillion, barring major structural reforms to government, according to the latest budget and economic outlook from the Congressional Budget Office (CBO).

According to the 2020 budget outlook released on Tuesday, the deficit for this year is projected to reach $1.015 trillion. There will be no turning back from there, as deficits are slated to grow every year for the remainder of the 10-year budget window, topping $12.4 trillion of cumulative new deficits by the end of the decade.

Perhaps the most shocking element of this report is the fact that unemployment is so low, yet deficits are as bad as they were during the worst times of the Great Recession. “Not since World War II has the country seen deficits during times of low unemployment that are as large as those that we project — nor, in the past century, has it experienced large deficits for as long as we project,” said CBO Director Phillip L. Swagel in a press conference on Tuesday.

It's no coincidence that since the debt has exploded over the past generation, we’ve never achieved solid economic growth, despite record low unemployment. Previously, during years in the 1960s, mid-1980s, and late 1990s, periods of low unemployment coincided with years of 4-5% GDP growth. Yet despite the lowest unemployment rate in half a century, the economy is growing right around 2%.

After missing 3% growth in 2018 by a hair, we have failed to achieve 3% annual growth since 2005 and 4% since 2000. The CBO projects gross domestic product will grow by just 2.2 percent this year and at an average pace of 1.7 percent over the next decade. At the same time, unemployment hasn’t been this low since the late 1960s, when there were years of over 6 percent growth.

What gives?

As the CBO notes, with increasing federal deficits, “crowding out of private investment occurs gradually, as interest rates and the funds available for private investment adjust in response to increased federal deficits.” Overall, the CBO projects that the accelerating level of debt, which is slated to more than double as a share of GDP over the next 30 years, will “dampen economic output over time.” It also warns that “rising interest costs associated with that debt would increase interest payments to foreign debt holders and thus reduce the income of U.S. households by increasing amounts.”