Journal Article

U.S. Federal Debt Has Increased, but Appears Sustainable for Now


Abstract: The unprecedented fiscal stimulus packages that Congress passed earlier this year provided timely assistance to households and businesses, but also led to a sharp increase in U.S. federal government debt. We find that the current net federal debt level of about 100 percent of GDP does not pose a threat to fiscal sustainability. Over a longer horizon, debt sustainability will depend, to a large extent, on whether the federal government can curb mandatory spending or raise taxes.

Keywords: Fiscal stimulus; Federal debt; Fiscal limit;

JEL Classification: H30; H63;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2020-11-16

Pages: 4