Stimulus Today Costs Dearly Tomorrow

Michael LebowitzAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Since the pandemic-related fiscal stimulus, the outstanding Federal debt has risen appreciably. In nominal dollar terms, the recent debt surge is mindboggling. However, the increase is on par with the government’s negligence over the last fifty years.

The red bars show the percentage increase in debt starting in 1966. The bars reset to zero every time they hit 50 percent. The numbers to the left of each series of bars correspond to the number of quarters it took for every 50 percent increase.

federal debt

Over the last sixteen quarters, 2020 through 2023, the outstanding federal debt has risen by 46 percent. Of the 11 times the debt has increased by 50 percent since 1966, five occurred over 15 quarters or less.

That said, the repercussions of relying on stimulus for economic growth and growing debt faster than the ability to pay for it have significant economic consequences. The recent surge in debt will only further handicap our economy and future prosperity.