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.

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Where this collides

• Cannot both be true

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

  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.

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

• The lower a country's neutral interest rate, the smaller the fiscal and welfare costs of public debt and the larger its welfare benefits. OBOlivier Blanchard1 Jun 2022public debtinterest rates
• During post-2008 fiscal consolidation, the costs of high public debt were overestimated and fiscal multipliers were underestimated, understating the output costs of austerity. OBOlivier Blanchard1 Jun 2022public debt
• The main obstacle to sound fiscal policy debate is a widespread, quasi-religious belief that public debt is inherently bad. OBOlivier Blanchard1 Jun 2022public debt
• A bank should be managed against the fat tails it can imagine, not against the stress test its regulator hands it. JDJamie Dimon16 Jul 2025interest rates
• A central bank can eliminate a self-fulfilling ('sunspot') debt crisis simply by credibly committing to buy as many bonds as needed at the low interest rate. OBOlivier Blanchard1 Jun 2022interest rates

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