New Analysis Projects $4.2 Trillion Budget Deficit This Year

The coronavirus crisis is projected to add nearly $8 trillion to the national debt

NEW YORK, NY — The federal budget was already on track for a historic $1 trillion deficit this year—and then the coronavirus arrived. A new analysis by Manhattan Institute senior fellow Brian Riedl projects that the budget deficit will exceed $4.2 trillion this year, or 19 percent of the economy—the largest share in American history outside of the peak of World War II and double the level during the Great Recession. In a series of striking graphs, Riedl lays out the extent of the economic toll of the coronavirus crisis, highlighting the critical importance of fiscal responsibility when the country emerges on the other side.

The report’s key findings include:

• The 2020 budget deficit is projected to exceed the combined 2014–2019 deficits.
• Over the next decade, the coronavirus recession is projected to add nearly $8 trillion to the national debt, pushing this figure to $41 trillion—or 128 percent of the economy, more than at the height of World War II.
• This $8 trillion tab represents expected borrowing over the next six years, effectively pushing up the clock on the federal debt crisis.
• The federal government is projected to spend just over $49,000 per household this year.
• Federal spending is projected to rise to nearly 29 percent of GDP, while revenues are expected to collapse to just 10 percent of GDP.

Click here to read the full report.