The US, among most other global economies, crashed from a booming 2019 to a recession in 2020, which was triggered by the Coronavirus pandemic. At the end of the 4th quarter of 2019, the US had a record-breaking debt of $21 trillion. With the pandemic sending the economy into a tailspin, the 2nd quarter national debt is now over $26 trillion.
Trade is slowly opening back up, but we are still faced with a skyrocketing debt. Unemployment figures hover at 11 percent. However, many people are out of a job permanently. Thanks to the pandemic, the immediate economic forecast looks grim.
As with most economic downfalls, the worst effects are being felt by those at the bottom of the socio-economic ladder. The middle class is struggling. Those most vulnerable at the lower strata of society are seeing a future without prospects.
At the end of the 4th quarter of 2019, the Debt-to-GDP ratio was around 80 percent. That number was considered high, and much of it was due to President Trump’s huge tax cuts. At the end of the 2nd quarter of 2020, the US government is making every attempt to help the economy, and those attempts, which involve rescuing businesses and individuals from disaster, have raised the national debt to unprecedented levels.
Most economists believe that in order to prevent a serious depression, the US must, at least in the foreseeable future, rack up more debt to salvage the economy. In other words — keep spending.
The current pandemic is already affecting the economy in disastrous ways. The national debt is already slowing down any anticipated growth. In the future, it could lead to a loss of confidence in the government’s ability to survive and handle any of its debts.
Source: Virginia Fidler | The Gold Telegraph
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