We Have Crossed the Line Debt Hawks Warned Us About for Decades [View all]

The debt of the United States now exceeds the size of its gross domestic product. That was considered a doomsday scenario that would wreck the economy. So far, that hasn’t happened.

Economists and deficit hawks have warned for decades that the United States was borrowing too much money. The federal debt was ballooning so fast, they said, that economic ruin was inevitable: Interest rates would skyrocket, taxes would rise and inflation would probably run wild.

The death spiral could be triggered once the debt surpassed the size of the U.S. economy — a turning point that was probably still years in the future.

It actually happened much sooner: sometime before the end of June.

The coronavirus pandemic, and the economic collapse that followed, unleashed a historic run of government borrowing: trillions of dollars for stimulus payments, unemployment insurance expansions, and loans to prop up small businesses and to keep big companies afloat.

But the economy hasn’t drowned in the flood of red ink — and there’s a growing sense that the country could take on even more without any serious consequences.

https://www.nytimes.com/2020/08/21/business/economy/national-debt-coronavirus-stimulus.html