Will COVID-19 Break the National Debt?
GOP lawmakers are starting to voice concerns about the national debt as Democrats talk about a fourth stimulus package.
Congress has already spent more than $2 trillion on three coronavirus-relief packages designed to keep Americans afloat during the pandemic. Such massive spending is expected to increase the national debt, which is currently at $23 trillion. When combined with lost tax revenue from lockdowns across the country, the increase in debt over the next year could easily exceed $4 trillion.
Analysts already expect the national debt to eclipse the size of the entire US economy this year for the first time since WWII. The same thing is expected to occur in the UK.
“Let’s weigh this very carefully because the future of our country in terms of the amount of debt we’re adding up is a matter of genuine concern,” says Senate Majority Leader Mitch McConnell (R-KY).
McConnell’s concerns were echoed by Senator Rand Paul (R-KY), who tested positive for COVID-19 last month and recently returned to Washington after a quarantine.
“My advice to the Senate and to the American people is let’s be aware of what we’re doing by creating all this new debt, and let’s think before we jump into a terrible, terrible conclusion,” said Paul. “No amount of money, not all the money in China, will save us from ourselves…The only hope of rescuing this great country is to reopen the economy.”
Congress is going to have to make some incredibly tough choices after the pandemic blows over. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, has proposed raising the retirement age and increasing gas taxes to mitigate the financial impact of COVID-19. Others favor social bonds and carbon taxes.
For years, experts have been saying the US economy will collapse when the national debt reaches $35 trillion. This was projected to occur no earlier than 2030, but with COVID-19 spending, it could occur even sooner.
Unfortunately, Republicans and Democrats will continue to blame the deficit on each other, with neither party stepping up to find a solution. The deficit will continue unchecked until we reach a breaking point.
I am suspecting President Trump to step up in his second term to work on the debt. No one has ever won a second term by focusing on the national debt. It is just a bad campaign issue.