We already knew that the budget deficit will hit a record-breaking $3.3 trillion this year as the federal government continues to run up debt in response to the COVID-19 crisis. Yet a new report from the nonpartisan Congressional Budget Office (CBO) shows that we aren’t just facing a short-term spike in deficits. We’re on an uncontrolled spiral toward perilous and unprecedented levels of debt.
The CBO’s latest findings update its already-bleak projections with the latest spike in federal spending. It concludes that by 2021 the size of the national debt will exceed 104% of Gross Domestic Product. Simply put, we will owe more in debt than our economy produces in an entire year. Economists have long considered this important benchmark a red flag for when a nation’s debt is approaching truly harmful and potentially catastrophic levels.