Gross domestic product
January 29, 2021
Should we be worried about the national debt? Thanks to Covid-19 and the stimulus checks, issued and forthcoming, we can’t just print more money. The stimulus for individuals and grants for business and industry have been a godsend for millions of Americans, but in spite of the aid, millions are still going hungry, facing eviction and living off credit cards with unforgivable interest rates, unable to make even the minimum payment.
As America’s debt increased to peaks not reached since World War II, it’s funny that most Americans don’t seem concerned. Economists seem to think that the pandemic is reshaping how people feel about debt. The test seems to be: if the money is put to good use and the interest remains low, rock on.
Traditional thinking has been that a country’s debt load should stay well-shy of it’s Gross Domestic Product, GDP, monetary measure of all domestic goods and services in a year. America’s has already reached 79% of that mark, with it reaching 100% and over in 2021. For the rest of us, a balance sheet with that kind of performance would lead to meltdown, making it difficult to meet expenses. Fortunately, the Fed has said that there will be little or no change in interest for the next three years. What would happen if foreign investors called in their notes? Experts say interest rates would rise and that would hurt the economy. Only time will tell because, like our lifestyles, we’re traveling in uncharted waters.