A&M economist: National debt will equal annual GDP
The economic slowing caused by COVID-19 prompted the federal government to act quickly--to the tune of $3 trillion. Through loans, grants and new programs, those dollars were meant to synthetically prop up the U.S. economy at this critical point.
However, that money had to come from somewhere. The U.S. borrowed the funds, furthering the national deficit to record levels.
According to Texas A&M Private Enterprise Research Center Director Dennis Jansen the deficit is now nearing dangerous levels.
"It's possible for a government to borrow so much," Jansen explains, "that they're going to have difficulty repaying."
Jansen clarifies that he believes borrowing right now is the right move, but he questions the lending practices over the last half-decade.
"In the past three, four, five, six years, the U.S. government has been running a deficit, and it's been increasing over time," Jansen said, "and those were good times."
Jansen concludes that while the level of borrowing currently exhibited by U.S. government is historic, it was the right move at the right time and can be managed to mitigate serious adverse effects on the long-term health of our economy.
Watch the full conversation from First News at Four in the video player above.