How will the bailout and stimulus spending affect our national debt?
The stimulus bill passed in February 2009 created an estimated $794.1 billion in spending programs and tax cuts. However, this understates the program’s long-term cost, because some of the stimulus spending increases will probably be made permanent. According to the Congressional Budget Office, extending 20 popular stimulus bill provisions will bring the bill’s 10-year cost, including debt payments, to $3.27 trillion. The effect of bailout spending on our national debt is harder to predict. Many of the bailouts involve loans and stock purchases. If companies regain financial health, stock prices stabilize and loans are paid back, the government may recoup a large amount of the bailout money. However, to fund the bailout and stimulus, the government has already had to borrow, adding to the national debt, increasing the interest payments due.
