How Much Can America Spend on the Coronavirus Pandemic? – By Andrew Soergel (US News) / April 21 2020
Despite staggering coronavirus-relief outlays in the trillions of dollars, analysts widely believe long-term debt burdens are a better alternative to short-term economic collapse.
In a matter of weeks, the federal government has signed off on roughly $3 trillion in coronavirus-related economic stimulus – rolling out record-breaking relief that experts say is necessary in the short-term but will exacerbate debt burdens in the years ahead.
More is on the way in the next few days, with an expected $500 billion tranche of support expected to make its way to President Donald Trump’s desk through a fourth round of congressional stimulus. So how much can the government continue to spend on safeguarding the economy in the short term without worsening economic outcomes down the road?
Economists have for years debated the issue of how much debt the U.S. can reasonably take on. But most agree that the Fed and members of Congress don’t have an unlimited pool of money to play with – despite the Fed’s actions largely being interpreted as an endorsement of unlimited asset purchases and monetary policy support.
Many analysts also agree the U.S. is entering dangerous budgetary territory. The immensity of America’s debt is expected to eclipse the magnitude of its economy by the end of the year.
There aren’t immediate, commonly agreed upon consequences for debt totals eclipsing the size of a nation’s economy. But it’s generally accepted that the path the U.S. is on is an unsustainable one – and, in some sense, it was an avoidable one, despite the ongoing coronavirus pandemic.
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