U.S. media reported on the 14th that during the administration of US President Donald Trump, U.S. Treasury bonds increased by more than $7 trillion.
And during the term of his successor, this number may be higher.
“We’re in a pit,” said Gus Faucher, chief economic analyst at PNC Financial Services Group.
If you don’t act quickly, the economy can suffer huge and lasting damage.”
The United States is now carrying more than $27 trillion in national debt.
Faucher warned that if the economy is not repaired now, it will be more difficult to adjust the budget plan and solve structural challenges in the future.
In fiscal 2020, the total amount of U.S. Treasury bonds has exceeded GDP.
The U.S. federal government has no plans to use tax increases to cover the fiscal expenditure caused by the economic stimulus.
On the 14th, U.S. President-elect Joseph Biden said in Wilmington, Delaware, saying that the economic relief plan passed by Congress at the end of last year was far from enough to deal with the crisis, and more measures needed to control the coronavirus pandemic and rescue the economy. To this end, he proposed an economic rescue plan totaling $1.9 trillion.
Under the economic rescue plan, about $400 billion will be used to fight the pandemic, about $1 trillion will provide economic relief to families hit by the pandemic, and about $440 billion will be used to provide assistance to small businesses, state and local governments struggling with the pandemic.
However, whether the plan can be approved by Congress remains uncertain.
The U.S. Congress passed a $900 billion economic relief package at the end of last year.
Some lawmakers explicitly oppose the federal government’s large expansion of the budget deficit and the push up of debt.
CNN said that members of Congress have been reluctant to reform the social security and health insurance system, making the federal budget deficit unsustainable before the outbreak.
The Trump administration’s economic stimulus and tax cuts have caused the deficit to grow explosively. At the time of the outbreak, the federal budget deficit had reached $1 trillion.
In fiscal year 2020, the federal budget deficit of the United States was 3.1 trillion US dollars.
The Federal Budget Accountability Commission, an independent research institute in the United States, predicts a federal budget deficit of $2.3 trillion in fiscal year 2021.
However, Maya McGinhas, chairman of the Federal Budget Accountability Committee, believes that the federal budget deficit in fiscal year 2021 may be higher than expected, given the Democratic Party’s control of the congressional Senate.
Referring to the economic rescue package launched by the Biden team, she said: “The idea that an additional $2 trillion is needed seems quite premature.”
Given the current economic situation, McGinhas admits that the United States needs to borrow more debt.