In a world where nothing from the past, even recent past seems to matter “I deserve, I’m entitled” does. Under the guise of a pandemic, money has become no obstacle to any thing we want. Sen Sanders wants everyone to receive their full pay up to $90,000 a year for the duration. There are ongoing demands for higher Social Security and Medicare benefits.
What we seem to forget is that the burden we are creating, will fall on younger Americans and those to come in the near future.
Our projections show that:
- Deficits will expand by $5.7 trillion over the 2020-2030 window as a result of the current crisis and response to date, to almost $20 trillion under current law.
- The budget deficit will total $3.7 trillion (17.9 percent of GDP) in 2020 and average $1.6 trillion (6.3 percent of GDP) per year from 2021 through 2030.
- As a share of the economy, debt will grow from 79 percent of GDP before the crisis to 101 percent by the end of 2020 and 118 percent of GDP by 2030.
- By 2050, debt will reach 220 percent of GDP and deficits will total 14.4 percent.
- All major trust funds will exhaust their reserves in just over a decade: The Highway Trust Fund in 2021, the Medicare Hospital Insurance trust fund in 2023, and the theoretically combined Social Security trust funds by 2031.
- Under a scenario in which various expiring provisions are continued and more economic relief is enacted, deficits would average $2 trillion per year (7.8 percent of GDP) between 2021 and 2030 and reach 18 percent of GDP by 2050; debt would grow to 131 percent of GDP by 2030 and 269 percent by 2050.
Though short-term borrowing is necessary to fight the current crisis, deficits are far from costless. As a result of the current crisis, debt will likely eclipse the size of the economy this year, a decade earlier than previously projected. When the economy does recover, this elevated level of debt, if not ultimately brought under control, threatens to slow income growth, increase interest payments, place upward pressure on interest rates, reduce the fiscal space available to respond to future needs or emergencies, place an undue burden on future generations, and heighten the risk of a fiscal crisis.
Source: The Committee for a Responsible Federal Budget