Myers: COVID-19 Relief and the National Debt

A couple of news headlines caught my attention. One was that the new coronavirus relief bill may not pass until after the election. The other was that the airlines are pushing for more federal relief. 

The coronavirus relief bill will likely be in the neighborhood of $2 trillion if Trump and Pelosi reach a deal. The airline stimulus is apparently going to be a part of the coronavirus relief bill.

I’m not going to comment on the merits of the various needs presented in this bill. There are, no doubt, plenty of industries, businesses, and people still hurting and hurting badly because of the actions we have taken to battle COVID-19. But the headlines got me to thinking about the money.

I found a cool website, Committee for a Responsible Federal Budget, where COVID relief is tracked. You can really get down in the weeds are far as where the money is all going, and you can get a little overwhelmed, just trying to understand the numbers. Here’s something of a summary:

“To date, we estimate policymakers have committed trillions of financial support — including $587 billion through administrative actions, $3.8 trillion through legislative actions, and $7.0 trillion through Federal Reserve actions. Approximately $414 billion (70 percent) of administrative support has been committed or disbursed, along with $2.2 trillion (almost 60 percent) of legislative support and $2.2 trillion (over 30 percent) of Federal Reserve support. On net, we estimate these measures will increase ten-year deficits by $2.6 trillion.“

They also estimate that the budget deficit for fiscal 2020 will be $3.3 trillion. They have a link where you can see the annual deficit projections here. 

Note that none of these numbers include the additional $2 trillion in spending that may be coming in the next month or two. 

This coronavirus crisis has certainly proved that neither political party is serious about either reducing spending or debt. The national debt was already nearly $23 trillion at the end of Fiscal Year 2019. It’s currently at over $27 trillion, and I can’t be sure how much of the coronavirus relief shown above is already in that number.

As a side note, interest on the debt in fiscal 2020 was over a half a trillion dollars, and that was with low-interest rates.

This debt will never be paid. Realistically, with the current size and scope of the federal government and the programs it administers for its citizens, it can’t be. That’s not a good situation for us to be in.

This is Brian Myers with your Caffeinated Thought of the Week.