If history is any guide, running up debt is not advisable. But making sense of the economy is a constant challenge because it keeps changing, and the past doesn’t tell us much about the future. Technology evolves, trade increases, and more people achieve higher educational levels; the nature of work changes, as do the factors that influence unemployment and inflation and interest rates. It is now conventional wisdom that things once seen as big risks—excessive debt and inflation—are no longer as much of a concern.
Deficits Don't Matter -- Until They Do
Can we rule out high inflation and a rising interest rate in the next year, or over the next decade? What about the next 30 years? The Biden administration hopes to grow deficits even as the United States recovers from the pandemic; these debts will be paid over several decades.
If history is any guide, running up debt is not advisable. But making sense of the economy is a constant challenge because it keeps changing, and the past doesn’t tell us much about the future. Technology evolves, trade increases, and more people achieve higher educational levels; the nature of work changes, as do the factors that influence unemployment and inflation and interest rates. It is now conventional wisdom that things once seen as big risks—excessive debt and inflation—are no longer as much of a concern.
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If history is any guide, running up debt is not advisable. But making sense of the economy is a constant challenge because it keeps changing, and the past doesn’t tell us much about the future. Technology evolves, trade increases, and more people achieve higher educational levels; the nature of work changes, as do the factors that influence unemployment and inflation and interest rates. It is now conventional wisdom that things once seen as big risks—excessive debt and inflation—are no longer as much of a concern.
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