The US government debt is forecasted to exceed 100% of its gross domestic product (GDP) in 2021 due to coronavirus spending, economic slowdown, and shrinking tax revenue.
“That would put the US in the company of a handful of nations with debt loads that exceed their economies, including Japan, Italy, and Greece,” Wall Street Journal reported on Tuesday.
So far, the impending surge in deficit hasn’t deterred investors from buying the US government bonds. That’s because the Federal Reserve is running an open-ended asset purchase program and plans to keep interest rates low even if inflation exceeds the 2% target for some time.
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