There Is No Looming U.S. Debt Crisis
America has unique advantages that allow it to borrow more money than other nations.
Some reasons not to worry.
Photographer: Alex Wong/Getty Images North AmericaAs concern mounts about the rising levels of U.S. government debt, it’s important to keep in mind two principles that are not quite opposing but not quite complementary: First, there is no looming debt crisis. Second, the U.S. needs to address the growing federal deficit over the medium term in a deliberate way.
To be clear, the pandemic has created an unprecedented shock, and the economic outlook is difficult at best. If there are Depression-like levels of unemployment for an extended period, then it would be a profound economic crisis and public debt will explode. That’s very different from saying that public debt will cause an economic crisis. There are a number of reasons to think that it will not.