WASHINGTON, DC - MARCH 24: Sheets of one dollar bills run through the printing press at the Bureau of Engraving and Printing on March 24, 2015 in Washington, DC. The roots of The Bureau of Engraving and Printing can be traced back to 1862, when a single room was used in the basement of the main Treasury building before moving to its current location on 14th Street in 1864. The Washington printing facility has been responsible for printing all of the paper Federal Reserve notes up until 1991 when it shared the printing responsibilities with a new western facility that opened in Fort Worth, Texas.(Photo by Mark Wilson/Getty Images)
U.S. to owe more than the size of its economy for the 1st time in 75 years
By Scott Horsley/NPR
Mark Wilson/Getty Images
WASHINGTON, DC - MARCH 24: Sheets of one dollar bills run through the printing press at the Bureau of Engraving and Printing on March 24, 2015 in Washington, DC. The roots of The Bureau of Engraving and Printing can be traced back to 1862, when a single room was used in the basement of the main Treasury building before moving to its current location on 14th Street in 1864. The Washington printing facility has been responsible for printing all of the paper Federal Reserve notes up until 1991 when it shared the printing responsibilities with a new western facility that opened in Fort Worth, Texas.(Photo by Mark Wilson/Getty Images)
The pandemic is taking a big toll on the government’s bottom line.
The federal government’s accumulated debt burden is projected to be larger than the overall economy next year for the first time since 1946. Debt is expected to reach an all-time high of 107% of gross domestic product in 2023.
The nonpartisan Congressional Budget Office expects the deficit to reach $3.3 trillion in the fiscal year ending this month. That’s about 16% of GDP — a level not seen since the end of World War II in 1945.
Federal spending has soared to 32% of GDP this fiscal year as the government tries to address both the economic and public health costs of the pandemic. The coronavirus has infected more than 6 million people in the United States and claimed more than 180,000 lives here.
With tens of millions of people out of work and countless businesses struggling or shuttered, tax revenues are falling. Revenues are projected to be 16% of GDP this fiscal year — down from 16.3% last year and 18% in 2015.
The Congressional Budget Office projects that both revenues and spending will decline in the upcoming fiscal year, which begins Oct. 1. Next year’s deficit is expected to be 8.6% of GDP.
Despite the historically high debt levels, the government’s borrowing costs are expected to remain low for the next several years. The Congressional Budget Office projects interest costs will decline through 2024 before turning upward in the latter half of the decade.
