For anyone looking out on the world from the new Biden White House, America’s challenges can only seem extraordinarily daunting.
Even if it could be taken in isolation, the public health crisis brought about by the COVID-19 pandemic would gravely test any administration. But, of course, the coronavirus challenge cannot be resolved in isolation. Beyond its immediate public health dimensions, the pandemic has created an enormous economic crisis for a United States whose status as a global leader has never looked so compromised in the postwar period.
For Washington, the pandemic has also spawned a fiscal crisis, with the Treasury Department obliged to outlay trillions of dollars in order to compensate for demand lost to the stop-and-go shutdown of the nation throughout a year of hapless mismanagement and confusion under the Trump administration. Like all debt, this emergency stimulus spending will eventually need to be paid back. It comes, moreover, on top of a towering mountain of existing American debt. However tempting, arguments about the low present costs of deficit borrowing are no guarantee that coming generations will find financing it comfortable or even feasible.