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Will Rising Federal Debt Slow Economic Growth?
There is always a lot of controversy around the implications of high and rising government debt. Over the past 70 years, rising government debt has generally been accompanied by weaker economic activity. The cause and effect can be debated, and there is also a bit of a chicken-and-egg, or “circular” argument: High and rising debt is a burden on growth, but low levels of growth also trigger an increase in government spending, higher budget deficits and higher debt. In other words, one argument holds that a high and rising burden of debt crimps economic growth due to the “crowding-out” effect (that is, ... (full story)