The deficit for 2021 is already on track to reach $2.3 trillion, or 10.4 percent of gross domestic product, higher than any year except 2020, according to estimates from the Committee for a Responsible Federal Budget, a budgetary watchdog group.
Last year’s deficit hit a record-shattering $3.1 trillion, over twice the previous record of $1.4 trillion in the midst of the Great Recession.
“It would be higher than any other time in recorded history outside of World War II,” the group noted.
The main driver of the climbing deficit has been the pandemic, which required an enormous uptick in government spending just as the economy crashed.
The $2.3 trillion figure is higher than the $1.8 trillion the nonpartisan Congressional Budget Office estimated in September, largely because Congress passed an additional, $900 billion round of relief measures in its year-end funding bill.
The estimate did not grow as much as may have been expected given the size of the spending bill and a bevy of tax extenders because forecasts for the economic recovery have improved, meaning fewer unemployment benefits to pay out and more tax receipts from businesses and individuals.
Economists largely agree that deficit spending during a crisis is helpful for economic recovery, but that large deficits need to be tackled in good times to avoid high debt levels weighing down future economic growth.
Updated at 3:29 p.m.