CBO Confirms Debt Exceeded 100% of GDP for FY 2020
For Immediate Release
The Congressional Budget Office today released an end-of-year summary report for fiscal year 2020, which confirms that the national debt breached the size of the economy. Although third quarter economic growth was higher than expected, the $3.1 trillion deficit for FY 2020 pushed the national debt to $21 trillion, or 100.1 percent of GDP.
Below is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
We now have official confirmation that the national debt is about the size of a full year’s worth of economic output. Debt is higher than any time in history outside World War II. However, unlike World War II, debt is projected to continue rising after the pandemic and economic crisis ends.
Much of this year’s deficit was necessary to fund the health care and economic response to the COVID crisis. But our national debt was on an unsustainable trajectory before the pandemic. During the economic expansion, lawmakers kept kicking the can down the road and pushing through unpaid for tax cuts and spending hikes.
At this point, we’ll likely need to borrow even more to combat the pandemic and support the economy. But once the crisis has passed and the economy has recovered, lawmakers will need to figure out how to get our fiscal situation under control.
Even after the economy has recovered, some will call for additional tax cuts and higher spending, insisting we can worry about how to pay for it later. We’ll need leadership from both sides to resist taking the easy way out and instead start making the necessary tradeoffs to pay for the services the government provides, rather than saddling the youngest generation with the hard choices we decided to avoid.
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