(News 24h) – Mr. Trump makes the US huge debt but Mr. Biden may exacerbate.
During the four years in office of US President Donald Trump, the US government debt held by the public has increased by 7.8 trillion USD to 21.6 trillion USD.
This means that each American is carrying about $ 23,500 in public debt.
|Each American is carrying about $ 23,500 in public debt.|
President-elect Joe Biden has pledged to implement a spending program that could add trillions of dollars over the next year. At 100.1% of gross domestic product, debt exceeded the annual output of the economy, putting the US on par with economies including Greece, Italy and Japan.
The rate of increase in annual deficits corresponding to the size of the economy under President Trump ranks third highest (5.2% of GDP), after the administration of President George W. Bush (11, 7%) and Abraham Lincoln (9.4%), according to top Washington budget researcher Eurgen Steuerle, co-founder of the Urban-Brookings Center for Tax Policy.
The Federal Budget Accountability Commission (CRFB) said the US budget deficit could reach $ 2.3 trillion for fiscal year 2021. With a debt-to-GDP ratio reaching 108%, the US is more likely will break 1948’s record of highest debt after World War II.
Notably, US public debt is forecast to skyrocket under Mr. Biden. The debt build-up can have painful, but necessary, consequences in the current context.
The report released on January 14 found 965,000 Americans applied for unemployment benefits for the first time last week, up from 784,000 the week before. Unemployment is still at its worst rate since the 2008 Financial Crisis. The US lost 140,000 jobs in December. This is the first drop since last spring.
“This is the time to increase fiscal stimulus and pull the economy back into its old orbit. We cannot think too much,” Brusuelas said.
Currently, there is no tax increase policy to offset this cost. Accepting an increase in the budget deficit will help reduce the damage caused by the health crisis, while tackling growing inequalities.
Although the stock market continuously set records, other parts of the economy still struggled. Movie theaters, airlines, hotels and many other industries are bearing heavy losses. The Back-to-Normal index of CNN and Moody’s Analytics shows that the US economy is only operating at 74% capacity in early March.
“We are still in a deep hole. The economy will suffer terribly in the long term if we don’t act fast,” said Gus Faucher, chief economist at PNC. Without supporting the economy now, Faucher said, it would be even more difficult to rebalance the budget and address structural challenges in the future.
President-elect Joe Biden has announced the detailed plan of a rescue package of $ 1,900 billion for the US economy during the pandemic. This is an additional package, after the $ 900 billion package last month. The proposal includes $ 2,000 per person, state subsidies, unemployment insurance, to speed up America’s fragile capital recovery.
Many believe that the Biden administration should wait a few more months to assess the impact of the $ 900 billion package last month before pushing the new financial aid package.
|President-elect Joe Biden with economic stimulus packages will make the US heavy debt?|
Maya MacGuineas – Chairman of the Federal Budget Council (CRFB) – an independent financial watchdog said: “Right now it seems too early to throw another close to $ 2 trillion, when we first adopt the package. pre-stimulated “. Even so, she admitted “maybe I have to borrow more first for the situation to change”.
Many analysts believe that $ 2,000 is needed support right now. Since June, nearly 8 million Americans have joined the poor list, according to research from the University of Chicago and Notre Dame.
About 27 million adults currently belong to households that did not have enough food in the past 7 days, according to the Census Household Pulse Survey.