The Government does not have any actual money. We have seen exploding deficits causing the need to borrow to finance day to day operations. While in the midst of this deficit growth a tax cut that benefited the wealthiest Americans at the cost of all of us.
So any additional expenditures are going to increase the debt. Still despite this demand for more and more buyers interet rates have stayed remarkably low by historic measures. This has allowed us to pay the interest which represents more and more of the budge. With the impact of the pandemic, the budget deficit for 2020 is projected to be the highest ever and not really close to the previous high. How high it goes depends on the future stimulus plan but projections are at $3 trillion or more.
This might be unavoidable and going forward the country is going to have to develop some plan to get the deficits under control. Increasing debt payments, especially if interest rates increase, will require other areas get cut or taxes get raised.
Growth would of course help and the tax cuts were supposed to create that but they generally didn't. Now we are in a pandemic caused recession. Revenues will be down and payments up.
It would be nice if there was a way to build a consensus on how to fix this issue. Either there has to be more income (taxes) or less spending. Spending is particularly hard since to many defense is untouchable and to other social program are untouchable.
This issue is particularly troublesome as we see some important priorities like health insurance and climate change growing.
We of course first need to solve the pandemic but the national debt can't rise like this forever. Its another crisis in the making and instead of trying to assign blame we need to solve it and the others.
We are all this together.
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