Michael R. Strain, Columnist

Exploding U.S. Debt Is a Problem, Not an Emergency

Don’t cut badly needed coronavirus spending now. (But pare Social Security and Medicare later.)

September 4, 2020 at 11:00 AM UTC

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”

Tick, tick, tick.
Photographer: Steve Pope/Getty Images

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Government programs to blunt the economic impact of the coronavirus pandemic will make the federal budget deficit much wider in 2020 than at any point in the last 75 years. The nonpartisan Congressional Budget Office’s new forecasts, released this week, predict that the deficit will be over $3.3 trillion this year, or 16% of annual economic output. Measured as a share of GDP, the annual U.S. budget deficit hasn’t hit double digits since 1945. The CBO forecasts that the 2021 deficit will be higher than in all but two years between 1946 and 2019.

These deficits will boost the national debt, which the CBO forecasts will total $21.9 trillion in 2021. Next year, for the first time since World War II, the national debt will be larger than annual GDP. Beginning in 2023, the CBO projects that the debt will be larger than at any point in U.S. history.