Over the years, the federal government has spent trillions of dollars more than it brings in, racking up big deficits even in good times, when it ought to be paring debt down.
Now, as it struggles to repair the damage from the coronavirus epidemic, it's getting ready to spend trillions more, pushing up this year's deficit above $3 trillion.
"It's mind-boggling. I never contemplated this," says Douglas Holtz-Eakin, president of the American Action Forum, who headed the Congressional Budget Office under President George W. Bush.
"I can remember the quaint days when I was being yelled at because we had a $400 billion deficit and I was the CBO director. It doesn't look so bad right now," he says.
The economic rescue package approved by Congress and signed into law by President Trump contains $2 trillion in tax breaks and loan guarantees, throwing much-needed lifelines to troubled airlines, small businesses, hospitals, medical supply companies and municipal governments.
And more money will almost certainly be needed in the weeks to come, as the pandemic progresses.
"We are talking about massive amounts of money compared to anything we've ever done in this amount of time before," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
At one time, such huge levels of deficit spending set off alarm bells in Washington, where politicians such as Senate Majority Leader Mitch McConnell routinely bemoaned the lack of fiscal discipline in government.
In 2013, when the country was still recovering from the Great Recession, McConnell told CBS News: "We now have a debt of $16.4 trillion. That's as big as our economy. That alone makes us look a lot like Greece. We have an incredible spending addiction."
Today, the total amount owed by the federal government is about to top $25 trillion, and McConnell barely talks about it. Neither does Trump, who has presided over a rapid increase in debt, thanks to the massive 2017 tax cuts and a big increase in defense spending.
Part of this is just raw politics, says Dean Baker, co-founder of the Center for Economic and Policy Research. Politicians tend to focus more on deficits when the other party controls the White House.
But Baker says the past few years have also brought a transformation in the way economists think about deficits.
Once, conventional wisdom said that too much federal borrowing would drive up interest rates, leading to higher inflation and reduced productivity, Baker says. But debt has soared in recent years, and interest rates are lower than ever, he notes.
"The classic story of why deficits are bad just hasn't panned out," Baker says.
He is among many economists now arguing that the quick collapse of the economy and the surge in layoffs are so serious that deficit concerns should be set aside.
"The amount of employment in the economy is going through the floor. And the deficit in that context ... it's almost a non sequitur. That's not the sort of thing you should worry about," Baker says.
Even MacGuineas, who's something of a deficit hawk, agrees, saying times like these are precisely when the government needs to run deficits. But she says the government is that much less prepared to deal with the crisis because of deficits run up in good times, when it should have been paying off what it owed.
"It makes sense to borrow from the future today. We have a real emergency. But it also makes it harder for us to get our economy back on track once we get through this emergency," MacGuineas says.
MARY LOUISE KELLY, HOST:
The federal government's debt level is as high as it has been since right after World War II. And it's about to get much higher now that the historic $2 trillion recovery package has been signed into law. NPR's Jim Zarroli reports on the massive spending bill and what economists are making of its impact on the deficit.
JIM ZARROLI, BYLINE: Congress has pulled out all the stops to try to reverse the economic damage done by the coronavirus. There are small business loans, direct payments to low- and middle-income workers, expanded unemployment benefits and money for big corporations. Maya MacGuineas of the Committee for a Responsible Federal Budget says the bill will be really expensive.
MAYA MACGUINEAS: We are talking about massive amounts of money compared to anything we've ever done in this amount of time before.
ZARROLI: The federal government already runs an annual budget deficit of a trillion dollars - that's trillion with a T. All this extra spending will drive that up to 2 or even $3 trillion this year. Douglas Holtz-Eakin is former head of the Congressional Budget Office.
DOUGLAS HOLTZ-EAKIN: It's mind-boggling. I never contemplated this. I can remember the quaint days when I was being yelled at because we had a $400 billion deficit now and I was the CBO director. Doesn't look so bad right now.
ZARROLI: There was a time when that kind of deficit spending would have raised alarms in Washington. In 2013, when the U.S. economy was still recovering from the Great Recession, Senate Majority Leader Mitch McConnell told CBS that deficit spending was the single biggest threat to the country.
(SOUNDBITE OF CBS BROADCAST)
MITCH MCCONNELL: We now have a debt of $16.4 trillion. That's as big as our economy. That alone makes us look a lot like Greece. We have an incredible spending addiction.
ZARROLI: But today, total debt owed by the government is almost $24 trillion, and McConnell barely mentions it.
(SOUNDBITE OF ARCHIVED RECORDING)
MCCONNELL: This is no ordinary time. The American people need help, and they need it fast.
ZARROLI: And as for President Trump, he hardly talks about the deficit at all. Part of this is just raw politics, says Dean Baker of the Center for Economic and Policy Research. Politicians only express concern about the deficit when the other party controls the White House. But Baker says there's also been a transformation in the way economists think about deficit spending.
DEAN BAKER: The classic story of why deficits are bad just hasn't panned out.
ZARROLI: Baker says many economists used to worry that too much borrowing by the government would raise interest rates and generate higher inflation. But government debt has been steadily rising, and interest rates are lower than ever. So Baker says, right now with the economy in so much turmoil, people shouldn't spend too much time worrying about debt.
BAKER: The amount of employment in the economy is going through the floor, and the deficit in that context - I just don't even see how that - it's almost a non sequitur. That's not the sort of thing you should worry about.
ZARROLI: Even Maya MacGuineas of the Committee for a Responsible Federal Budget, who's something of a professional deficit hawk, agrees. She says the U.S. economy is in desperate shape. This is exactly the time when you want to be running a deficit.
MACGUINEAS: It makes sense to borrow the money from the future today. We have a real emergency. But it also makes it harder for us to get our economy back on track once we get through this emergency.
ZARROLI: MacGuineas says over the past few years when the economy was doing so well, the government should have been paying off debt. Instead, it did the opposite - cutting taxes and spending more and more money. And now that a real crisis has come along, the government is that much less prepared to deal with it.
Jim Zarroli, NPR News, New York.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.