The US government’s debt will exceed the size of the economy next year for the first time since World War II due to the coronavirus pandemic.
The Congressional Budget Office published its latest report on federal deficits and debt on Wednesday.
Federal debt held by the public is projected to rise sharply to 98 percent of gross domestic product (GDP) this year, compared to the 79 percent at the end of 2019, according to the report.
Debt is forecast to exceed 100 percent in the 2021 fiscal year and increase to 107 percent in 2023, which is the highest in the nation’s history.
The previous peak occurred back in 1946 due to the large deficits incurred during WWII.
Only a handful of counties have debts that exceed the size of their economies, including Japan, Italy and Greece.
The fiscal year begins October 1 and ends September 30.
The report also projects that the US government’s budget deficit is projected to hit a record $3.3 trillion this year, which is the worst since World War II.
The $3.3 trillion federal deficit projected for 2020 is more than triple the shortfall recorded last year, according to the report.
The report also projects that the US government’s budget deficit is projected to hit a record $3.3 trillion this year, which is the worst since World War II
That increase is mostly due to the economy being ravaged by the COVID-19 pandemic and the federal rescue packages passed by the government in response.
So far this year, more than $3 trillion in emergency coronavirus pandemic aid has been enacted into law.
These huge federal outlays have caused a surge in this year’s already large deficit and federal debt.
CBO’s latest forecast does not include another round of coronavirus aid that Congress might consider, which could exceed $1 trillion.
Deep disagreements among lawmakers have slowed work on that measure.
At 16 percent of gross domestic product, the deficit this year would be the worst since 1945 when WWII ended.
Meanwhile, federal outlays are projected to equal 32 percent of GDP in 2020, which is about 50 percent above what they were last year and the highest percentage since 1945.
The report forecasts that revenue is projected to fall from 16.3 percent of GDP in 2019 to 15.5 percent in 2021.
It is due primarily to the economic disruption caused by the coronavirus pandemic and the federal government’s response to it.