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The US government’s war against the coronavirus is imposing the most massive strain on the Treasury since America’s drive to defeat Nazi Germany and imperial Japan three-quarters of a century ago.
The Congressional Budget Office has warned that the government this year will run the largest budget deficit, as a share of the economy, since 1945, when World War II ended.
Next year, the federal debt — the sum of the year-after-year gush of annual deficits — is forecast to exceed the size of the entire American economy for the first time since 1946. Within a few years, it’s on track to set a new high.
It might be surprising to hear that most economists consider the money well-spent — or at least necessary. Few think it’s wise to quibble with the amount of borrowing deemed necessary to sustain American households and businesses through the gravest public health crisis in more than 100 years.
That’s especially true, economists say, when the government’s borrowing costs are super-low, and investors still seem eager to buy its debt as fast as the Treasury issues it.
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