FYI: As the national debt swells, some economists are making a once-heretical argument: The U.S. needn’t be so worried about all of its red ink.
The 2017 Republican tax cuts and this year’s Democratic spending proposals have reignited long-simmering worries that the debt is getting too big. Annual deficits are set to top $1 trillion starting in 2022 and the Congressional Budget Office projects debt will total 93% of gross domestic product by the end of the next decade.
Yet borrowing costs are still historically low, despite a surge in deficits and debt in the years following the financial crisis. Debt as a share of GDP rose from 34% before the recession, to 78% at the end of 2018. Treasury yields, on the other hand, have fallen from over 4% before the recession to 2.7%.
That suggests investors aren’t worried about holding large volumes of credit.
Regards,
Ted
https://www.wsj.com/articles/worry-about-debt-not-so-fast-some-economists-say-11550414860
