The U.S. already faces a major budget crisis in both short-term and long-term spending. It seems very likely that both these crises will have become much worse by June, after we have a second massive round of spending to deal with Covid-19. At this point, however, it is unclear when the full Covid-19 crisis will be over, and how deeply it will affect our economy and society.

We also face major uncertainties as to how we will deal with actual spending in the FY 2021 budget, and how the new administration will deal with the FY 2022 budget request due to come out in early 2021. Much of this budget request will have been drafted by the Trump administration. It will probably not suit all of the priorities of the Biden administration; it may or may not adequately reflect all the coming needs for Covid-19 spending and realistic assumptions about the U.S. economy; and managing the real world national budget and efforts to rebuild the economy will be an ongoing challenge through at least all of calendar 2021.

We will almost certainly will not be able to predict the full impact of Covis-19 until the late summer or fall of 2021 – if then. We will not know the full impact of the Trump versus Biden approaches to taxation and revenues, the real level of success in economic recovery, and impact of any new entitlements and social legislation before some point at the end of 2022 – if then.

If we are lucky, the outcome in dealing with the Covid-19 crisis may be as successful as the aftermath to 2008. However, we face a very real risk of a prolonged economic crisis and/or massive increase in our future debt, and the possible need to make major efforts to cut defense and foreign aid spending.

Moreover, the U.S. faces the problem of adjusting its spending and taxes to deal with new social and entitlements expenditures to deal with racism, national health care, retirement, and the cost of college and university education in a world with a steadily rising standard of technology and job creation. The U.S. cannot afford many of the proposed solutions to these problems, but it must find better and more expensive solutions than it has today.