ACTV - How Bad Is Fiscal Policy?
2024-07-16 08:45:00 ET
Summary
- Federal debt is $27.7 trillion, not $34.9 trillion as commonly stated, with interest rates currently keeping the burden lower than in the 1980s.
- Knowing how much the federal government owes to the world is one thing, but the burden of the debt is quite another.
- The burden of the debt depends on the level of interest rates and the nominal size of the economy.
It's no secret that the federal debt is bigger, relative to the economy, than at any time since WW II, that deficits these days are measured in trillions, and that interest on the debt likely exceeds spending on defense. It's unquestionably bad. But is it out of control? Not yet....
How Bad Is Fiscal Policy?