Mary: This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program looks at dangers of the debt. Mike, one of the big downsides of federal financial assistance during the pandemic has been that all the money has been borrowed. This has meant trillions have been added to the national debt. Won’t this eventually cause the country big problems?
Mike: Summary Answer
- There are costs, but not what people think
- Lenders will not ask for their money back
- Federal government won’t ask each household to pay their share
- Instead, cost will be slower economic growth in the future
- We have essentially taken money from the future and spent today
- Means less money available in the future, including for investments
- Economic research shows this will slow future growth in the economy and in the standard of living
- But alternative would have been to let the economy, households, and businesses flounder during the pandemic
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.