The covid-19 pandemic is set to increase public debt to levels last seen after the second world war. But is rising public debt a cause for concern? New economic thinking suggests perhaps not, at least for now.
Further reading:
Find The Economist’s most recent coverage of covid-19 here: https://econ.st/31E02VY
Sign up to The Economist’s daily newsletter to keep up to date with our latest covid-19 coverage: https://econ.st/3ghRh7W
Why economics sometimes changes its mind: https://econ.st/3hXRP41
Read more about the debt after covid-19: https://econ.st/2DtpX92
Why governments must beware the lure of free money: https://econ.st/2GufJXf
Read about the Fed’s biggest inflation-policy change in decades: https://econ.st/31VyJG0
Why covid-19 could eventually lead to the return of inflation: https://econ.st/354m9X4
Read about the economies that have started to bounce back: https://econ.st/2OM8fzA
Why fiscal policy must shift as economies start to recover: https://econ.st/3hnBSDB
Read our article on the resilience of banks: https://econ.st/3hjG8E2
Why investors at home and abroad are buy American government debt: https://econ.st/3hYBBaM
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I am shocked. The economist explaining me, that basic market mechanism led to the low interest rates after 2008. Nominal interest rates are set by the central bank… the important question would be: why was inflation so low in the us and eu, although central banks kept the interest rate low?
Factor in inflation in a 2 % bond and it becomes worthless sooo well done… 😂
It’s controversial to say that gdp growth greater than interest rates automatically means capacity to honor a country’s debt.
Let's be honest most economists say what they are paid to say. They are right in theory until the next crisis.
Yeah and I want to know when them evil officials has there accountability date because if a Citizen steals a meal to feed their kids they will be prosecuted these people steal trillions of dollars every day in our faces and we do nothing about it. What a weak country of people that so divided we can't stand together in unity to change our country because people are so programmed and enjoy living in their own prison they created
We need to abolish the entire Federal Reserve debt system.
In 2027 we will pay over $3 trillion in interest on our national debt while we bring in $5 trillion in federal tax revenue. Our country is in big trouble.
The French haven’t paid a penny on their sovereign debts to Britain and America since 1931. It’s trillions owing, doubling every 14.5 years. Why aren’t the French forced to pay, or instead bankrupted? Alternatively, sell the debts to the sort of people who have the stomach to collect.
The only reason I even owe debts is because they killed the McKeans in 1831(Thomas McKean 1776-1831 and Thomas McKean 1799-1831) took 30 million pounds of gold and silver and said we owed. They killed us in America for our bank so I definitely owe after that. Fair is fair.
No wonder the US is in bad shape. What will happen if China's naval fleet is equal to the US seven fleet or bigger and unilaterally demands payment in GOLD for its holdings of mature US. Treasury Bills regardless of the agreement?
Modern monetary theory posits that an economy can accommodate deficit spending as long as its rate of economic growth outpaces the increase in interest rate generated by the existing debt. This has to do with capacity for economic growth, which is extremely high for the USA. It’s also necessary to realize that a nations economy is NOT like the economy of a household.
How will a rise in interest rates be an issue for countries that have already borrowed? Won't they have to pay the agreed upon interest rates?
The issue would then arise only if the country is dependent on borrowing.
After WW2 the US was the only industrial country that was not devastated, as soon as the war was over we made every thing from soup to nuts. This is not the case. The idea you can just keep spending is stupidity.
Did you know that everyone believes your children will work hard and make money? No? Well they do! Now… take that money from your children and spend it now!! why not! That is literally the argument here.
Entropy demands that the System Collapse. There is nothing we can do about it. It is the Physics of Economics. It is coming very soon. Run.
"He's gone. And there is nothing we can do about it"
Treba vykradnut Iran
Denku
This is financial advice and I never give financial advice: DONT LEAVE DURING THE BEAR. If you don’t want to invest…learn. If you don’t want to learn…build. If you don’t want to build observe. DO SOMETHING…other than leave. There is so much opportunity here. Take advantage!
So if govs borrow too much, it means that to pay back they might not have enough from regular sources like tax, and might print money instead, which is a way of devaluating their currencies, is it more or less so?
If anyone noticed, public debt!!! And not government debt put on the public
We don't create enough new jobs the average highschool has 2000 students every 4 years there's not enough new employment to support the rising population they don't make enough jobs for all the kids they pop out
I don't have 700 grand to buy a franchise to employ people locally there's not enough labor
They refuse to employ their own population
We don't create enough new jobs the average highschool has 2000 students every 4 years there's not enough new employment to support the rising population they don't make enough jobs for all the kids they pop out
The vietnam war happened because of the automotive industry and rubber plantations for tires the occupation of the middle east was for oil and gold
Internally displaced people is why the riots in the 70s happened and modernization
When the corporation does bad the people in middle and lower brackets end us as refugees
The ceiling crushes you
A goverment functions the same as a corporation that's the problem
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