Economists Who Weren’t Worried About the Debt Are Now Panicking
What really concerns them isn’t just the $40 trillion.
By Will Gottsegen, The Atlantic
America’s national debt hit $40 trillion last week. That number certainly feels like something worth panicking over—the mind balks at all the zeros. But although the debt has been in the trillions for decades, not everyone has considered it a problem.
One camp of economists has been warning about the perils of high debt for years: Budget hawks predicted that if the country kept spending and didn’t raise taxes enough to keep pace, the resulting fiscal crisis could be devastating. But others—the doves—have brushed it off. Their perspective was that as long as the U.S. GDP was growing faster than the interest rate it was paying on its debt, the Treasury would be able to keep rolling over its bonds without too much of a problem. For much of the 2010s, this was essentially the status quo, and debt panic was muted.
