Fiscal rescue to push debt burden close to WWII levels

With Congress ramping up its fiscal stimulus rescue package, federal debt will rise above 100% of GDP this year, not far off the record high of 108% of GDP in the aftermath of WWII. That is not a concern for the next year or two, but it does raise the prospect that, as in the 1940s, reducing debt will eventually require a mix of higher inflation and financial repression, with the Fed potentially capping Treasury yields.