CNBC: NY Fed President Williams Says U.S. is not 'Anywhere Near' Its Limits to Run up Debt

June 03, 2020

Article by Jeff Cox in CNBC financial

Burgeoning levels of government debt are not posing a broader threat and have been necessary to battle the coronavirus pandemic, New York Fed President John Williams said Thursday.

Even with the federal IOU at $25.6 trillion and counting, the central bank official said there’s still plenty of room to spend more.

“I don’t think we’re anywhere near the limit to that,” Williams said during a webinar presented by Stony Brook University in Long Island. “The U.S. government is issuing a lot of debt right now, and global investors are gobbling it up.”

Total government debt has jumped $2.2 trillion since just before the crisis began, an increase of 9.4%, thanks in good part to the CARES Act that provides more than $2 trillion in rescue funds for an economy that could contract more than 40% in the second quarter.

Congress has been debating additional stimulus that could run to $3 trillion as states begin a tentative reopening of their shuttered economies.

The U.S. already had been on its way to a budget deficit in excess of $1 trillion that now likely will be closer to $3 trillion ...

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