First of all, the numbers are wrong. Pre virus, the expected deficit this year was 1.1 trillion. Stimulus was about 2.4 trillion. The part that generates the real error here is that the original 1.1 trillion presumed economic activity that would generate tax revenue of an amount that partly offset the spending that created 1.1 trillion deficit.
We aren’t going to have that economic activity. It doesn’t matter if you’re locked down or not. There is no functional economic difference between lockdown and people choosing not to infect themselves at a crowded restaurant. They are the same thing economically.
So airlines will have a huge loss this year. The oil industry will have a huge loss mostly from low oil price. The cruise industry is crushed and will not be a contributor tax revenue. Sports are dead and probably will stay that way and they won’t be paying any taxes either. Disneyland Shanghai just reopened with a limit of 20% on park capacity. They’ll probably shut down again when it’s clear people are not going to come into crowds and infect themselves.
So the number is 3.7 trillion and it’s wrong and it’s wrong low. You might want to call it more like 4.7 trillion. In Phase 2 of stimulus is coming. Might want to tack on another 2 trillion.
6.5 trillion is a reasonable guess for this year’s deficit. GDP will shrink substantially and a reasonable estimate of that would be 17 trillion, down from 21.5.
After this deficit the national debt will be about 28 trillion. Our debt to GDP ratio, best not to think about that.
Where are the “roaring out of it” , “stronger then ever”, etc. Freepers? The ones who insisted that healthy people be locked under tyrannical rule? Those lines where always there fallback.
“6.5 trillion is a reasonable guess for this year’s deficit. GDP will shrink substantially and a reasonable estimate of that would be 17 trillion, down from 21.5.”
The shutdown was a disaster. It never should have happened. Our children’s children will be paying for this fiasco long after we are gone.
While one can quibble about the numbers (like arguing how tall the iceberg was that sunk the Titanic), the bottom line is our debt as a nation is growing exponentially and there will be a price to pay for that. The article does a decent job of detailing the consequences, which are real.
There will be a day of reckoning!