COVID-19 Pandemic Sends National Debt to Highest Level Since World War II

  • Date: 24-Dec-2020
  • Source: Newsweek
  • Sector:Economy
  • Country:Middle East
  • Who else needs to know?

COVID-19 Pandemic Sends National Debt to Highest Level Since World War II

The coronavirus pandemic has roiled the markets, tossed most fiscal assumptions to the wind and driven the national debt to the highest level since World War II, as the government spent heavily to support the economy.The U.S. Treasury Department's final report for fiscal year 2020 showed a record $3.1 trillion deficit for the year, with debt held by bondholders totaling $21 trillion.The Congressional Budget Office (CBO) estimated that federal debt this year will total 102% of Gross Domestic Product (GDP)—the value of all goods and services produced in a year. But the CBO's estimate may be optimistic. Preliminary figures peg this year's federal debt at about 136% of GDP.Even with spending cuts or higher taxes, debt is projected to rise as a share of the nation's economy, increasing to 109% of GDP by 2030 and 195% by 2050. That means that after the emergency spending and borrowing during the COVID-19 pandemic ends, the federal debt will likely continue to grow, and may be nearly twice as large as the nation's economy due to existing laws, programs and promises.Treasury Secretary Steven Mnuchin walks past a display of the U.S. national debt as he testifies to the House Financial Services Committee on