"Policymakers are interested in the concept of 'fiscal space,' or the amount of room available for additional government borrowing, as they discuss plans for the federal budget. Though budget deficits have declined in recent years, debt held by the public was estimated to equal 77.0% of gross domestic product (GDP) at the end of FY2016, which would represent the highest ratio since FY1950. This Insight examines contributing factors to fiscal space availability and discusses recent developments. Assuming a continuation of low interest rates, it is unlikely that fiscal space will constrain short-term federal operations, but projections indicate that fiscal space may be a binding constraint in the medium- and long-term outlook."
CRS Insight, IN10624
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html