The Congressional Budget Office now expects that the coronavirus will push the federal debt to the highest level in history, exceeding the previous record set during World War II.
Taking into account the trillions of dollars in new spending and the economic downturn caused by the coronavirus and related shutdowns, CBO expects the United States to add $5.8 trillion to the debt in the next two years, bringing the debt to 108% of GDP by the end of 2021.
That would break the previous record of 106% set in 1946, which was the debt that was acquired as the U.S. fought World War II. The difference is that after the war ended, deficits steadily shrunk. But the coronavirus crisis is coming with the U.S. already seeing debt explode due to the long-term entitlement crisis driven by the ballooning number of retirees and rising healthcare costs.
The CBO projections are also likely to be optimistic because they only take into account current law, estimating a $3.7 trillion deficit this year and $2.1 trillion in 2021. The projections don’t take into account inevitable future spending packages meant to combat the pandemic and the ongoing economic disruption, which will drive debt and deficits even higher.
