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Can America Do It All?

In fiscal year 2020, which ended on Sept. 30, the U.S. government set some impressive new records.

The deficit came in at $3.1 trillion, twice the previous record of $1.4 trillion in 2009, which was set during the Great Recession, and three times the 2019 deficit of about $1 trillion.

Federal spending hit $6.5 trillion, one-third of U.S. gross domestic product, a share unrivaled except for the later years of World War II when federal spending exceeded 40% of GDP.

The U.S. national debt, $14 trillion when Donald Trump took office, now stands at $21 trillion, roughly the same size as U.S. GDP.

In fiscal year 2021, the deficit could be of the same magnitude as 2020.

Why so? First, the economy is not fully recovered from the 2020 depression. Unemployment is still near 8%. Nancy Pelosi has already proposed $2.2 trillion in new spending to battle the effects of the coronavirus pandemic in the first month of this fiscal year. And COVID-19 cases are spiking again.

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