The US total federal debt surpassed $26 trillion, the Federal Reserve said in its quarterly statement on domestic financial accounts. Bearing in mind Donald Trump’s ambitions and his large-scale projects, experts warn that the public debt is bound to set new records. The International Monetary Fund reckons that the US public debt could balloon to 131.1% from GDP this year. Looking back, modern American history shows that the US used to be in a deep malaise. For instance, in 1946 the state debt increased to 106% from the nation’s annual economic output on account of humongous public spending after World War II. At present, the reason for swelling public spending is vast stimulus programs and extension of tax payments due to the pandemic. Besides, the tax reform implemented by Donald Trump before the COVID-19 outbreak curtailed budget revenues. Oddly enough, the US is one of heavily indebted nations with a high debt-to-GDP ratio under healthy economic conditions. Experts say that the national debt has been on the rise due to inefficient use of available funds and resources.   

The US House Committee on the Budget pointed out in its analysis that the legislation on reduced VAT rates for individuals would remain in force until the end of 2020. However, the Republicans reiterate that lower VAT rates will be valid beyond 2020. They pledge that the next Congress will push ahead with extending this legislation no matter how the seats will be distributed between the parties.