korrents

public debt

FilterEveryone, all time29 from 8 people
Group All Technologists 1Economists & investors 3Politicians 1Writers & journalists 2
Who Everyone OBOlivier Blanchard 16 BCBen Carlson 3 RDRay Dalio 3 FMFriedrich Merz 2 LALyn Alden 2 CMCharles Marohn 1 JCJohn H. Cochrane 1 RSRichard Stallman 1
When All time Past 1 yearPast 3 yearsPast 5 years
  1. RS

    Richard Stallman quoted

    Founder of the Free Software Movement and the GNU Project

    Our readingRepublicans' long-term strategy since Reagan has been to spend heavily on things that don't benefit the non-rich, refuse to raise taxes, and thereby balloon the national debt.

    America

    Their wordsRepublicans' long-term strategy, since Reagan, is to spend a lot of money (mainly on things that won't benefit non-rich Americans), refuse to raise taxes, and therefore greatly increase the national debt.

    ↗Urgent: Raise the Wage Actstallman.org 11th of 10 in this piece

  2. 3 weeks earlier
  3. BC

    Ben Carlson quoted

    Director of institutional asset management at Ritholtz…

    Our readingThe United States is not at risk of a financial crisis caused by the size of its government debt.

    governmentAmerica

    Their wordsSo my baseline assumption is that people will continue complaining about the trillions of dollars we have in debt but it won’t lead to a financial crisis.

    ↗My Most Contrarian Opinion Right Nowawealthofcommonsense.com 1st of 3 in this piece

  5. BC

    Ben Carlson quoted

    Our readingGovernment borrowing through the financial crisis and the pandemic was a good trade, because it repaired household balance sheets.

    government

    Their wordsI think the fact that the government took on debt during two crises to help households was a good trade-off.

    ↗My Most Contrarian Opinion Right Nowawealthofcommonsense.com 2nd of 3 in this piece

  7. BC

    Ben Carlson quoted

    Our readingThe real danger of high government debt is the policy errors it provokes, not a debt crisis.

    government

    Their wordsBut I am worried about high government debt levels causing policy errors.

    ↗My Most Contrarian Opinion Right Nowawealthofcommonsense.com 3rd of 3 in this piece

  8. 7 days earlier
  9. RD

    Ray Dalio quoted

    Founder of Bridgewater Associates

    Our readingA government's debt dynamics are a household's or a company's, except that it can print money and tax -- and those two powers are what change the ending.

    interest ratesgovernment

    Their wordsThe debt dynamics work the same for a central government as they do for a person or a company, except that a central government has a central bank that can print money (which devalues it) and it can take money away from people via taxes.

    ↗How Countries Go Broke: The Dynamic Behind What is Happening Nowraydalio.substack.com

  11. RD

    Ray Dalio quoted

    Our readingA government debt crisis is measurable and therefore visible well in advance; the diagnostic is mechanical rather than a matter of judgement.

    governmentinvesting

    Their wordsBecause one can measure these things, one can monitor this debt dynamic happening, so it’s easy to see problems approaching. I’ve used this diagnostic process in my investing and I’ve kept it to myself, but I’m now explaining it in detail in How Countries Go Broke: The Big Cycle because it is too important to keep to myself.

    ↗How Countries Go Broke: The Dynamic Behind What is Happening Nowraydalio.substack.com

  13. RD

    Ray Dalio quoted

    Our readingThe late stage of the Big Debt Cycle shows itself as long rates leading rates up, the currency falling against gold, and the treasury shortening maturities.

    interest ratesgovernment

    Their wordsEarly in the final stage of the Big Debt Cycle, the market action reflects this dynamic via interest rates rising led by long-term rates, the currency declining especially relative to gold, and the central government’s treasury department shortening the maturities of its debt offerings because of a shortage of the demand for long-term debt.

    ↗How Countries Go Broke: The Dynamic Behind What is Happening Nowraydalio.substack.com

  14. 16 months earlier
  15. JC

    John H. Cochrane quoted

    Economist at the Hoover Institution

    Our readingCutting off trade with tariffs would force a huge interest-rate spike and probably a debt crisis, because the budget deficit would have to be financed at home.

    interest ratestariffs

    Their wordsBut the spike in interest rates require to do this would be huge. And the trade shock will cause a sharp recession, or worse, putting even more stress on the budget. A debt crisis is likely along the way as the US finds it impossible to roll over debt.

    ↗Tariffs, saving, and investmentgrumpy-economist.com 5th of 6 in this piece

  16. 6 weeks earlier
  17. FM

    Friedrich Merz quoted

    Chancellor of Germany since May 2025; leader of the CDU

    Our reading · no longer heldGermany's constitutional debt brake will not be reformed.

    No longer holdsAngesichts der Bedrohungen unserer Freiheit und des Friedens auf unserem Kontinent muss jetzt auch für unsere Verteidigung gelten: Whatever it takes.

    SaidAngesichts der Bedrohungen unserer Freiheit und des Friedens auf unserem Kontinent muss jetzt auch für unsere Verteidigung gelten: Whatever it takes.

    ↗ZDFheute: Merz' Wende in der Schuldenpolitik — Whatever it takes (5 March 2025), quoting Merz on 4 March 2025zdfheute.de

  18. 7 days earlier
  19. FM

    Friedrich Merz quoted

    Our readingGermany's constitutional debt brake will not be reformed.

    Their wordsEs ist in der nahe liegenden Zukunft ausgeschlossen, dass wir die Schuldenbremse reformieren.

    ↗ZDFheute: Das Glaubwürdigkeitsproblem von Friedrich Merz (21 March 2025), quoting Merz on 25 February 2025zdfheute.de

  20. 7 weeks earlier
  21. LA

    Lyn Alden quoted

    Investment researcher and engineer who runs Lyn Alden Investment Strategy

    Our readingStructural fiscal deficits have surpassed private sector lending and monetary policy as the primary driver of economic activity and inflation.

    inflation

    Their wordsStructural fiscal deficits have surpassed private sector lending and monetary policy as the primary drivers of economic activity and inflation, marking a fundamental shift in the economy's liquidity dynamics.

    ↗Full Steam Ahead: All Aboard Fiscal Dominancelynalden.com 1st of 3 in this piece

  23. LA

    Lyn Alden quoted

    Our readingThe United States is not at risk of a financial crisis caused by the size of its government debt.

    optimismdisciplinegovernmentAmerica

    Their wordsStabilizing factors such as the global demand for U.S. dollars and debt denominated in its own currency suggest an era of fiscal dominance in the U.S. that's less dramatic than alarmists predict but more persistent and intractable than optimists hope.

    ↗Full Steam Ahead: All Aboard Fiscal Dominancelynalden.com 2nd of 3 in this piece

  24. 14 months earlier
  25. OB

    Olivier Blanchard quoted

    Economist; former chief economist of the International Monetary Fund

    Our readingWith r-g near zero, any advanced economy running a primary deficit will see its debt-to-GDP ratio rise once existing debt is refinanced at current rates.

    Their wordsThus, once current debt has been refinanced and the average interest on debt reflects the higher long rates, absent changes in policy, debt ratios will increase.

    ↗If markets are right about long real rates, public debt ratios will increase for some timepiie.com

  27. OB

    Olivier Blanchard quoted

    Our reading · no longer heldWhen 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.

    interest rates

    No longer holdsAcross advanced economies, the celebrated ( r - g ), i.e., the difference between the interest rate and the growth rate, appears to have durably changed sign or, at a minimum, to have gone from a substantially negative number to a number closer to zero.

    SaidAcross advanced economies, the celebrated ( r - g ), i.e., the difference between the interest rate and the growth rate, appears to have durably changed sign or, at a minimum, to have gone from a substantially negative number to a number closer to zero.

    ↗If markets are right about long real rates, public debt ratios will increase for some timepiie.com

  28. 17 months earlier
  29. OB

    Olivier Blanchard quoted

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

    fiscal policyreligion

    Their wordsThe main challenge in discussing fiscal policy is the widely held and nearly religious belief that public debt is very bad.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  31. OB

    Olivier Blanchard quoted

    Our readingSovereign debt markets can suffer sudden stops in investor demand even without material changes in economic fundamentals.

    investing

    Their wordsSovereign debt markets (and many other markets as well) are subject to sudden stops in which investors either drop out or ask for large spreads even in the absence of large changes in fundamentals.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  33. OB

    Olivier Blanchard quoted

    Our readingA longer average debt maturity protects a government from temporary interest-rate spikes and gives it more time to adjust to permanent rate increases.

    interest ratesgovernment

    Their wordsA longer maturity of debt protects the government from a temporary increase in the short run interest rate, and it gives it more time to adjust to a permanent increase.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  35. OB

    Olivier Blanchard quoted

    Our readingAssessing whether government debt is sustainable is as much an art as a science.

    government

    Their wordsassessing debt sustainability is as much art as it is science.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  37. OB

    Olivier Blanchard quoted

    Our readingQuantitative rules are not a reliable tool for ensuring government debt sustainability.

    government

    Their wordsI am skeptical of the use of quantitative rules to ensure debt sustainability.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  39. OB

    Olivier Blanchard quoted

    Our readingPublic investment cannot be assumed to be automatically financeable by debt merely because it has high social returns.

    Their wordsThus, as desirable as public investment is, the proposition that it can be automatically financed by debt is wrong.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  41. OB

    Olivier Blanchard quoted

    Our readingThere is no universal debt-to-GDP threshold beyond which government debt becomes unsustainable; sustainability depends on factors like the real interest rate.

    interest ratesgovernment

    Their wordsThe analysis in this chapter has shown that there is no such thing as a universal threshold over which debt becomes unsustainable, and that the relevant debt level depends on many factors, in particular the real interest rate on debt.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  43. OB

    Olivier Blanchard quoted

    Our readingA 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.

    interest ratesinvesting

    Their wordsThis is precisely the role the central bank can play. By announcing that it stands ready to buy the bonds that investors want to sell at the price associated with the low interest rate, and credibly indicating that it has deep enough pockets to buy whatever is needed, it can eliminate the bad equilibrium.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  45. OB

    Olivier Blanchard quoted

    Our readingCanceling government bonds held by a central bank creates no fiscal space, because the reduction in government interest payments is exactly offset by an equal reduction in the profits the central bank remits to the government.

    interest ratesgovernment

    Their wordsThe proposition is that the cancellation of the bonds held by the central bank would decrease the amount of interest payments and thus the debt service of governments. And indeed, it would. But it would have another effect—namely, to decrease the revenues of the central bank and thus the profits that the central bank turns in to the government. This second effect would be exactly of the same size as the first, and the net effect on the government budget constraint would be equal to zero.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  47. OB

    Olivier Blanchard quoted

    Our readingThe probability of a self-fulfilling bad equilibrium in sovereign debt markets depends little on the debt level itself, but is much reduced by a rule linking the primary balance to debt service increases.

    JavaScript

    Their wordsI have argued that the probability of a bad equilibrium is only marginally influenced by the level of debt, but can be much reduced by a contingent rule making the primary balance react to an increase in debt service.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  49. OB

    Olivier Blanchard quoted

    Our readingThe lower a country's neutral interest rate, the smaller the fiscal and welfare costs of public debt and the larger its welfare benefits.

    interest rates

    Their wordsThe lower the neutral rate, the smaller the fiscal and welfare costs and the larger the welfare benefits of debt and deficits.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  51. OB

    Olivier Blanchard quoted

    Our readingJudging 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.

    inflationinterest ratesJapan

    Their wordsJapanese macroeconomic policy is often characterized as a failure, with the central bank unable to achieve its inflation target, a low growth rate, and debt ratios steadily rising to reach more than 170% for net debt and 250% for gross debt. I think it should be seen instead as a qualified success, with the use of aggressive fiscal and monetary policies to compensate for very weak private demand: Output has remained close to potential.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  53. OB

    Olivier Blanchard quoted

    Our readingDuring post-2008 fiscal consolidation, the costs of high public debt were overestimated and fiscal multipliers were underestimated, understating the output costs of austerity.

    fiscal policy

    Their wordsThe costs of high debt were perceived to be very high—higher than they truly were—and the multipliers were underestimated, leading to an underestimate of the output costs of fiscal consolidation.

    ↗Fiscal Policy under Low Interest Ratesdirect.mit.edu All 22 from this book

  54. 3 years earlier
  55. OB

    Olivier Blanchard quoted

    Our readingWhen 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.

    interest rates

    Their wordsIf the future is like the past, this implies that debt rollovers—that is, the issuance of debt without a subsequent increase in taxes—may well be feasible. Put bluntly, public debt may have no fiscal cost.

    ↗Public Debt and Low Interest Rates (PIIE Working Paper 19-4)piie.com

  56. 8 years earlier
  57. CM

    Charles Marohn quoted

    Civil engineer and land use planner

    Our readingSuburban growth is a Ponzi scheme because a city of finite size cannot keep growing at an accelerating rate, and only that would pay the bills it has taken on.

    Their wordsOf course, with the suburban model, it is physically impossible for a city of finite dimension to grow indefinitely, let alone at amounts that accelerate forever.

    ↗The Growth Ponzi Scheme, Part 1strongtowns.org 2nd of 2 in this piece