by Oleg Burunov
Last month, a US Congressional Budget Office report revealed that the country’s federal debt is expected to stand at 98% of America’s GDP by the end of this year.
The Congressional Budget Office (CBO) has released a survey indicating that the 2020 fiscal year saw the US deficit hit $3.13 trillion, or 15.2% of the country’s Gross Domestic Product (GDP). The 2020 fiscal year expired on 30 September.
“If the CBO’s estimates are on the mark, the country’s total debt owed to investors […] will have outpaced the size of the economy, coming in at nearly 102% of [US] GDP”, CNN reported on Thursday, referring to estimates made by the Washington-based non-profit organisation Committee for a Responsible Federal Budget (CRFB).
The news network also cited CRFB president Maya MacGuineas as saying that “[US] debt is the size of the economy today, and soon it will be larger than any time in history”.
The CRFB calculations come after a CBO report in September claimed that the US federal debt held by the public is expected to equal 195% of the nation’s GDP by 2050, which will be a two-fold increase since 2020.
The survey claimed that with the federal debt due to stand at 98% of GDP by the end of this year, “the projected budget deficits would boost federal debt to 104% of GDP in 2021, [and] to 107% of GDP in 2023”.
The CBO argued that the size of the federal debt by 2050 “would be the highest by far in the nation’s history, and it would be on track to increase further”, something that the CBO warned would have far-reaching economic repercussions.
This was preceded by US Department of the Treasury data indicating in June that the country’s national debt had exceeded $26 trillion for the first time in history, as the nation grapples with economic fallout from the novel coronavirus pandemic.
The US government has provided up to $5 trillion in coronavirus bailout funds since March 2020. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed in late March and included $2 trillion, while the $3-trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act was adopted in May.