Washington’s borrowing a lot of money to pay for the costs of fighting the pandemic and some economists are asking how we will pay for all this deficit spending. With Today’s ALG Minute, I’m Catherine Mortensen.
Former Treasury Secretary under Bill Clinton, Larry Summers recently told Bloomberg News that he worries President Biden and Congress are spending too much, too fast.
“What was kindling is now igniting. And I am much more worried that we will have either inflation or we will have a pretty dramatic fiscal-monetary collision. I think this is the least responsible macro-economic policies we’ve had in at least 40 years.”
At our current burn rate, the deficit will amount to fifteen-and-a-half percent of the nation’s total gross domestic product. That share of GDP makes this year’s deficit, the fourth largest in history, behind only three years of borrowing to pay for the costs of fighting World War Two. The good news is – the cost of borrowing that money is low. But that could change – and therein lies the problem.
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