US government debt is exploding in size. The Congressional Budget Office lays out the patterns in "An Update to the Budget Outlook: 2020 to 2030" (September 2020). As usual, the baseline CBO estimates are based on currently existing law--for example, they do not take into account additional debt that would be incurred if one more fiscal stimulus bill was to pass before the election. Thus, the CBO estimates are focused on the large short-term spike in spending has already been legislated. Here's the pattern of total revenues and spending. That sharp spike in spending is being matched by a much larger annual budget deficit. The orange line shows the projection from March 2020; the darker line shows the change. Again, you'll notice that the CBO forecast is essentially for a short-term blip.
Timothy Taylor considers the following as important:
This could be interesting, too:
Timothy Taylor writes Every Day is a Bad Day, Say a Rising Share of Americans
Scott Sumner writes Their own worst enemy
Emilie Openchowski writes Weekend reading: Racial and gender discrimination in the labor market edition
Françoise Barré-Sinoussi writes Fighting the COVID Infodemic
If federal debt as a percentage of GDP continues to rise at the pace of CBO’s current-law projections, the economy would be affected in two significant ways: Growth in the nation’s debt would dampen economic output over time, and higher interest costs would increase payments to foreign debt holders and thus reduce the income of U.S. households by rising amounts. ... High and rising federal debt increases the likelihood of a fiscal crisis because it erodes investors’ confidence in the government’s fiscal position and could result in a sharp reduction in their valuation of Treasury securities, which would drive up interest rates on federal debt because investors would demand higher yields to purchase Treasury securities. ... Although no one can predict whether or when a fiscal crisis might occur or how it would unfold, the risk is almost certainly increased by high and rising federal debt. .... In addition, high debt might cause policymakers to feel constrained from implementing deficit-financed fiscal policy to respond to unforeseen events ..."
Throughout history, debt/GDP ratios have been reduced by (i) economic growth; (ii) substantive fiscal adjustment/austerity plans; (iii) explicit default or restructuring of private and/or public debt; (iv) a surprise burst in inflation; and (v) a steady dosage of financial repression accompanied by an equally steady dosage of inflation.This post is not the place to discuss these choices in any detail. But just to state the obvious, the US economy has not been more prone to slow productivity than to periods of rapid economic growth in recent decades; the US political system has been unwilling to restructure big spending programs like Medicare and Social Security; a large-scale restructuring or default on US debt seems like a highly unlikely last resort; and US inflation has been stuck at low levels for 25 years now, for reasons not fully understood. Thus, I suspect the US economy may be headed, by fits and starts, to a period of what Reinhart and Sbrancia call "financial repression." By this term, they mean a set of policies that invole much greater government management of the financial sector, including policies that focus on keeping interest rates very low and also limit other options available to investors--so that the government will find it easier to keep borrowing at low interest rates.