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Fed: The Piper Must Be Paid for Massive Govt Support Bills

The message from the Federal Reserve Bank last week was twofold: First, with a bit of luck, the U.S. economy might pull out of its swan dive by the end of 2020. Well, ok, that’s something the team here has been suggesting was possible. Secondly, the Fed wants you to know the U.S. government has incurred a lot of debt with these trillions of dollars of stimulus. And guess what. Somebody’s going have to pay it back. Sometime.

Both messages came through loud and clear in an intellectual full court press, with various Fed representatives making these points in speeches last week. For example, Fed Bank of Richmond leader Thomas Barkin noted that at some point the piper must be paid for the huge government debt incurred. U.S. government debt-to-gross domestic product percentage will likely go to over 100% by year’s end, compared to just 30% in 2007.

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