President Biden’s budget request is projecting that the U.S. debt burden will reach its highest level in history this year, surpassing the previous record from World War II.
In 2021, according to the Biden budget, the U.S. debt will reach 109.7 percent of GDP, which would blow past the previous record of 106.1 percent, just as the U.S. was coming out of World War II. It will then exceed the record every year over the next decade, reaching 117 percent of GDP by 2031.
While it is true that Biden inherited a high debt level as a result of the pandemic and the continued flow of Baby Boomer retirements driving up entitlement spending, Biden’s spending binge is exacerbating the problem. He signed a $1.9 trillion “COVID relief” bill in March, even though the pandemic was fizzling out and Congress had already spent $4.1 trillion on the pandemic. He is now proposing an additional $4 trillion in spending just this year.
Overall, Biden’s budget sees $69.2 trillion worth of spending over the next decade, which is $8 trillion more than $61.2 trillion in spending CBO was projecting in February, just a few weeks after he took office.
When the U.S. emerged from the crisis of World War II, Social Security was in its infancy, and Medicare and Medicaid did not even exist yet. Politicians in both parties made a concerted effort to pay down the war debt. Yet for the past several decades, both parties have steadily driven up the debt while ignoring our long-term challenges, and as we emerge from this crisis, Biden is throwing all caution to the wind.
There are some who embrace a new school of economics which holds that high levels of debt don’t matter. We’re now entering an era without precedent in American history that will put that premise to the test.