Economists project that sometime this summer, the national debt will set a record, exceeding the debt incurred during all of World War II.
The numbers are fueled by deficit spending, as Congress writes enormous checks to fight the pandemic and spur the recovery of the U.S. economy. All four members of Maine’s congressional delegation say they recognize that the debt will have to be addressed, but differ on how and when to take action.
This year, the cumulative national debt exceeds $28 trillion, which is higher than last year’s gross domestic product. In fact, it’s 107% of GDP, exceeding the numbers after World War II.
“World War II it was 106 percent,” says UMaine economics professor Jim Breece, who specializes in public finance.
Breece says while the current numbers seem staggering, it’s important to remember how the economy managed to emerge from World War II.
“We lived through that and the country survived,” he says. “In fact, the country paid back that debt and the debt went down to approximately 20% in the mid-’70s.”
And Breece says the booming economy following the war brought in enough revenue to not only pay for the costs of government, but to pay down the debt as well. He says as Congress considers ways to pay back the debt, it should prioritize economic growth.
Democratic U.S. Rep. Jared Golden of Maine’s 2nd District says the national debt is a chronic problem that has to be addressed.
“I think the last time that there was a successful balancing of the government’s budget was under President Bill Clinton,” he says. “This is a long-term problem and one that we have to take seriously.”
Golden says he is concerned that the debt issue is being overshadowed in Washington by the focus on additional spending for pandemic relief.
Democratic U.S. Rep. Chellie Pingree of Maine’s 1st District says while tackling the deficit is important, Congress must stay focused on the pandemic, which has claimed the lives of more than a half million Americans.
“About 400,000 people died in World War II. This is a comparable crisis. In January, we were losing more than 3,000 people a day,” she says. “That’s more than we lost in Pearl Harbor, that’s more than we lost at 9/11. We have to keep this in perspective.”
Pingree says the national debt should not be taken up until the economy has recovered, but one part of solving the problem may be to roll back some of the tax cuts passed by Congress in 2017.
Independent U.S. Sen. Angus King says Congress should also look to repealing some of the earlier tax cuts proposed by President George W. Bush.
“I actually did a calculation, worked with my staff to do a calculation, of what the deficit would be without the Bush and Trump tax cuts. And pre-Covid, the answer was pretty close to zero,” he says.
King says the deficit spending to address the pandemic has been necessary, and he expects there will be more of it this year. He says Congress will also have to address deficits within both Social Security and Medicare in a few years.
But Republican U.S. Sen. Susan Collins says some Democrats are pushing unnecessary expenditures that do not address the pandemic or its economic impacts, and that the best way to reduce the deficit is to grow the economy.
“If we can grow the economy that helps with the deficit. More people are paying taxes, that helps to reduce the deficit,” she says.
The $1.9 trillion relief package narrowly passed by Congress adds to the deficit, as will legislation investing billions in infrastructure projects that President Joe Biden has promised to introduce later this year.
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