Piling on more debt ...
Apparently, the one thing federal lawmakers in Washington have no problem agreeing upon is that debts don’t matter. This seems to be the salient conclusion to draw from the $2 trillion bailout/stimulus package deal reached this week to deal with the effects of the coronavirus, the government response to which is causing much economic anxiety.
As stated in this space before, the coronavirus required some sort of response. But one month ago few could have assumed that we were headed to the economic contractions that are just beginning to tell. Or that the government would be contemplating a $2 trillion package, an amount that doubled in just one week. Lawmakers seem to have become numb to such large numbers because they have virtually no meaning anymore.
Unfortunately, this gargantuan package is another contribution to the federal government’s unsustainable fiscal path, the consequences of which may be felt many years into the future.
From 1990 to 2005, the federal debt more than doubled, going from $3.2 trillion to $7.9 trillion. Between 2005 and 2020 it nearly tripled, to $23.5 trillion. Does anyone think this can go on forever without consequences?