America borrowed cheaply from the world and spent it on consumption rather than investment, exactly as Greece did.

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Where this collides

• Cannot both be true

  When safe interest rates are expected to remain below growth rates for a long time, rolling over public debt without later tax increases is feasible and public debt may carry no fiscal cost.

  Blanchard says that when safe rates are expected to stay below growth rates, rolling public debt over without later tax increases is feasible and the debt may carry no fiscal cost. Cochrane says the US borrowed a huge amount from foreigners at very low rates, spent it on consumption, and will either pay it back or go through a debt crisis. The cheap borrowing is the same fact; whether it is free is the disagreement.

• In tension with

  Judging by output kept near potential despite weak private demand, Japan's decades of high debt and low inflation reflect a qualified policy success, not failure.

  Blanchard reads Japan’s decades of high debt and low inflation as a qualified policy success, because output stayed near potential. Cochrane reads America’s version of the same borrowing as Greece before the crisis. The two countries differ in ways that could make both readings right, and neither man leaves much room for the other’s.

• In tension with

  The main obstacle to sound fiscal policy debate is a widespread, quasi-religious belief that public debt is inherently bad.

  Blanchard names a quasi-religious belief that public debt is inherently bad as the main obstacle to sound fiscal debate. Cochrane makes the case against this particular debt at length and on the merits — consumption rather than investment, foreign rather than domestic, a trillion a year. Whether that is the belief Blanchard is describing or the argument it is being mistaken for is the whole question.

Shared subject first, then similar wording. They may agree or disagree.

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