America’s Fiscal Exceptionalism Is All Too Real
Supposedly favorable comparisons of US public debt levels with those of Japan don’t pass the laugh test.
The one on the left is skating on fiscal thin ice.
Photographer: Minas Panagiotakis/Getty
A popular rebuttal of the idea that the US ought to worry about its surging public debt is, “What about Japan?” America’s taxpayers are currently on the hook for 123% of gross domestic product, exceeding the previous record of 118% in the aftermath of the second world war, and the number is going up. That does sound bad – but skeptics point out that Japan’s public debt stands at 250% of GDP, a level that has held steady in recent years, with no sign of fiscal collapse.
So a debt ratio of 250% seems both affordable and (in the sense that it isn’t exploding) sustainable. Will fiscal masochists please stop wringing their hands about rising US debt?