Narayana Kocherlakota, Columnist

The World Needs More U.S. Government Debt

The scarcity of safe assets is hurting the economy.

April 27, 2016 at 11:00 AM UTC

Narayana Kocherlakota is a Bloomberg Opinion columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.

Source of safety.
Photographer: Karen Bleier/AFP/Getty Images

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Are government-imposed restrictions holding back the U.S. economy? In a way, yes: The federal government is causing great harm by failing to issue enough debt.

The U.S. generates more income than any other country, and will keep doing so for many years to come. The federal government can generate a lot of revenue by taxing this income -- a power that puts it in a unique position to issue the kind of extremely safe bonds that are in great demand among the world's investors.