TRIVIA

Combating the Covid pandemic has meant one of the largest fiscal efforts in history. In the case of the U.S., the government has had to issue huge amounts of debt to finance the effort, a burden that will be compounded by other needs in the coming decades.

What percentage of GDP will the US federal debt held by the markets represent by 2050? 

a) 74%

b) 98%

c) 195% 

d) 252%

Response:

c) 195% 

195% is the Congressional Budget Office's projection, by far the highest proportion of federal debt in the hands of the market in the country's history, as we can see in this chart from Visualcapitalist. Federal debt held by the market exceeded 100% in 1946, when President Truman had to combat the post-war depression, but declined thereafter. Between 2019 and 2020 this debt-to-GDP ratio rose from 79% to 98% because of the pandemic and is expected to reach 104% this year. The strong growth expected from 2030 onwards is due to expected increased spending on Social Security and health coverage (Medicare).

https://www.visualcapitalist.com/timeline-150-years-of-u-s-national-debt/