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How Much Should Governments Borrow?

(The Economist)




In the last three months of 2018 America’s federal government borrowed $317bn, or about 6% of quarterly gdp. The deficit was 1.5 percentage points higher than in the same quarter the year earlier, despite the fact that the unemployment rate fell below 4% in the intervening period.


In cash terms America borrowed in a single quarter as much as it did in all of 2006, towards the peak of the previous economic cycle.


Such figures might once have sent the country’s deficit scolds into conniptions. But scolds are in short supply, at least within the halls of Congress. Republicans were the architects of President Donald Trump’s budget-busting tax plan. Read more


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