Even before the pandemic struck, U.S. federal debt was projected to balloon further because spending for Medicare, Social Security, and net interest payments were expected to far outpace revenues under current law.
Now, with the economic toll inflicted by COVID-19, the outlook for U.S. federal debt has deteriorated further.
It is expected to nearly surpass the size of the economy this year, and reach the highest level in U.S. history in only three years. By 2050, it is projected to be nearly double the size of the U.S. economy.
The consequences could be tremendous. The economists who work for the U.S. Congress warn:
High and rising federal debt makes the economy more vulnerable to rising interest rates and, depending on how that debt is financed, rising inflation. The growing debt burden also raises borrowing costs, slowing the growth of the economy and national income, and it increases the risk of a fiscal crisis or a gradual decline in the value of Treasury securities.Congressional Budget Office (September 2020)