Paul Krugman

@paulkrugman ↗

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Last Checked Feb. 7, 2021

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Fri Jan 15 17:20:39 +0000 2021

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Paul Krugman @paulkrugman

One reason is that the real value of debt is eroded by inflation. Real interest rates are currently negative, and overall real interest payments, as Furman and Summers point out, are at historic lows 3/ https://t.co/ooqy1WExMl https://t.co/8gN3WjKm87 — PolitiTweet.org

Posted Jan. 15, 2021

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Paul Krugman @paulkrugman

This happens to individuals and businesses! And it could in principle happen to the U.S. government. But the arithmetic is all wrong — so wrong that even if borrowing costs rise in the future it's just not likely to be an issue 2/ — PolitiTweet.org

Posted Jan. 15, 2021

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Paul Krugman @paulkrugman

But that understates just how sustainable debt is. We don't care about the absolute level of debt; if we worry at all, we worry about the ratio of debt to GDP. And this does the opposite of snowballing — it shrinks, other things equal — if r<g. What? 4/ — PolitiTweet.org

Posted Jan. 15, 2021