How will we pay for the economic damage?
As the economy crumbles, the stock market tanks, and the level of unemployment accelerates to approach levels not seen since the Great Depression, the administration, to its credit, has proposed a $1 trillion rescue package, “going big”: something which is likely to be only the first significant step to rescue the country and those who are now suffering as business and industry shut down amidst the coronavirus calamity.
My guess is that we will incur $2 to $3 trillion or more in additional debt before the bottom line for the effort is known, this on top of deficits that are currently running at $1 trillion or more per annum. Have our elected officials given any thought to how we will pay for this or even whether we will have to pay for it? Can we continue to simply issue more red ink as we take advantage of 0% interest rates? What will happen when interest rates return to normal levels, which someday, they inevitably will? How will we finance payment of the interest on our debt? How will state and local elected officials who are required to balance their budgets deal with plunging income and sales tax revenue? What services will they cut and/or what taxes will they increase?
When we defeat the coronavirus, which I pray will be soon, we will be forced to move on to the daunting challenge of how we pay for the extensive economic damage that has been inflicted. It will not be pretty.
Oren Spiegler
Peters Township