TRIVIA

The fight against the COVID pandemic has required one of the greatest fiscal efforts in history. In the case of the US, 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%

Answer:

c) 195% 

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

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