Since the global financial crisis of 2008, America's national debt has grown at a rate often faster than GDP. With recent pandemic relief measures, such as the $2T CARES Act which went into effect at the end of March 2020, the national debt surpassed GDP by nearly 18%.
Is this cause for concern?
Public sector debt has been a contentious topic for years and there's really two schools of thought.
On one hand, some believe government borrowing is a powerful tool for stimulating growth. Additionally, this group points out that current U.S. debt payments are manageable and the post-pandemic economic outlook is strong.
But on the other hand are those who believe excessive government borrowing may be harmful over the long term. This perspective says potential higher interest rates in the future, could divert government funds from certain discretionary spending categories including transportation, defense, healthcare and education.
There's probably truth in both perspectives. And with the national debt still rising, this likely will remain a topic of discussion well into the future.