Noah Smith at Noahpinion:
There is a pernicious and persistent pattern among many partisan pundits and politicians, pertaining to public debt. When their own party is in power, they minimize or ignore the problem, but as soon as the other guys win the presidency, they start shouting that the debtpocalypse is upon us.
Do I follow this pattern? Maybe a little bit. As recently as 2022, in Biden’s second year as President, I was not very worried about U.S. government debt. My reasoning was that A) interest rates were going to go back down after the surge in inflation had ebbed, preventing borrowing costs from getting severe, and B) Biden-era inflation had eroded some of the government’s debt burden.
But I still warned that there was some limit to government borrowing — eventually, at some difficult-to-predict point in time, too much debt would cause first interest rates and then inflation to soar. And I warned against listening to “fiscal arsonists” like the MMT folks, who aggressively advocated for higher government deficits.
And by 2023 — still under Biden! — I was starting to worry a lot more.
More here.
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