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by eigenspace
14 hours ago
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While I also disagree with the person you're responding to, there's more leeway than just borrowing below inflation. Roughly, so long as a government can borrow cheaper than nominal GDP growth (assuming a relatively constant ability to tax that growth), then the debt burden doesn't really grow, because your ability to finance the debt grows faster than the debt. But the problem is that the USA hasn't even cleared this bar, and its debt burden is growing, and there's also the additional risk that if borrowing costs go up due to a lack of confidence in the US government or global instability, even the current debt pile could be unmanageable. |
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