The U.S. national debt is predicted, in a Congressional Budget Office report, to reach 107% of the gross domestic product, the highest level in history, if current tax and spending laws don't change by 2031.
Greg Kaza, executive director of the Arkansas Policy Foundation, told Natural State News that changes need to happen to avoid a crisis.
"The central bank (Federal Reserve) should pursue tighter monetary policies to reduce inflation," Kaza said.
The Congressional Budget Office report also states that the current federal debt held by the public, which was 100% of the U.S. GDP at the end of the fiscal year 2020, is projected to reach 102% of the GDP by the end of 2021.
Kaza says that massive federal spending could disproportionally penalize Arkansas residents long-term.
"Payroll employment is the broadest state level economic indicator. Using this metric, Arkansas' economy is average, not strong because it trails the U.S. growth rate," said Kaza. "If the central bank monetizes government debt it will lower Arkansans' standard of living in the long-run."
He added that the Federal Reserve's decision last year to "pursue loose monetary policies" accelerate inflation the most.
Since the beginning of the coronavirus pandemic, the U.S. money supply has increased by 40%, as stated in an article in The Federalist.
Kaza says that to understand how low inflation rates can accelerate in a short period of time, the key is to look at history.
He noted that the last great inflation was the 1970s when the average annual rate was close to 7% and in 1972 the inflation rate was 3.3% and peaked at 13.5% in 1980, according to the Federal Reserve Bank of Minneapolis chart.
Lawrence Summers, former Clinton administration Treasury Secretary, warned that the recent economic stimulus passed by the Biden administration was likely to "set off inflationary pressures of a kind we have not seen in a generation," as covered in an article by The Federalist.
Senator Rick Scott (R-FL) said, in a recent post on his website, that inflation is projected to rise by over 60% from its pre-covid low of 1.4% to 2.3% or more
In a Shopkick survey mentioned in a recent Forbes article, 83% of Americans are tightening their budget this year due to inflationary pressures, while 54% are "very worried" about inflation.
This same survey by Shopkick also discovered that more than 90% of those who responded said that they noted an increase in grocery and gas spending since Biden took office.
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