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U.S. debt is on track to surpass the size of the nation's economy for the first time since World War II, according to a projection by the Committee for a Responsible Budget.
The nonpartisan group, which advocates for reducing the federal debt, estimated the deficit for 2020 will top $3.8 trillion, more than double the record set during the 2008 financial crisis. The deficit is the gap between what the federal government pays and what it collects in taxes; in fiscal 2019, the deficit was about $984 billion.
By the beginning of October, the group estimated the U.S. debt held by the public will surpass the country's $21 trillion economy.
"The chances are that this year, we will hit the point where our national debt is the equivalent of the size of the economy," Maya MacGuineas told FOX Business on Tuesday. "And that comes many years in advance of when we thought this would happen."
The group's calculations are based on the estimate that GDP will drop by 3.9 percent from fiscal 2019 to 2020 and rise by 3.2 percent from fiscal 2020 to 2021. It also assumes that Congress will not enact additional legislation to blunt the economic pain caused by the coronavirus pandemic; so far, lawmakers have passed three emergency aid packages totaling nearly $3 trillion -- an unprecedented amount.
It estimates the nation's debt will be $20.61 trillion on Oct. 1, compared with nominal GDP of more than $20 trillion.
The proportion of debt to GDP will continue to swell, the committee said, eventually passing the World War II record of 106 percent by 2023 as Washington continues to borrow. It cautioned its estimates were likely low, as they did not take into account additional stimulus measures that legislators are hoping to pass.
Still, the group acknowledged the majority of the deficit was "inevitable and necessary in light of the current pandemic crisis."
Policymakers are trying to stave off an economic catastrophe with the passage of the stimulus packages; economists have warned the economy will see a historic contraction in the second quarter, with estimates ranging as high as 38 percent.