U.S. Federal Debt Has Increased, but Appears Sustainable for Now

Huixin Bi, Wenyi Shen and Shu-Chun Yang

Economic Bulletin, 2020, 4

Abstract: The unprecedented fiscal stimulus packages that Congress passed earlier this year provided timely assistance to households and businesses, but also led to a sharp increase in U.S. federal government debt. We find that the current net federal debt level of about 100 percent of GDP does not pose a threat to fiscal sustainability. Over a longer horizon, debt sustainability will depend, to a large extent, on whether the federal government can curb mandatory spending or raise taxes.

Keywords: Fiscal stimulus; Federal debt; fiscal limits (search for similar items in EconPapers)
JEL-codes: H30 H63 (search for similar items in EconPapers)
Date: 2020
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