Stories to Watch: Unsustainable Fiscal Policy

Stories to Watch: Unsustainable Fiscal Policy - ARNOLD KLING

• s hard to grow your way out of debt; the choice between hard default and hyperinflation; those of us who cried wolf should have been heeded

"The fall in the U.S. public debt/GDP ratio from 106% in 1946 to 23% in 1974 is often attributed to high rates of economic growth. 

This paper examines the roles of three other factors: primary budget surpluses, surprise inflation, and pegged interest rates before the Fed-Treasury Accord of 1951...

Pointer from Tyler Cowen.
Oy. Their conclusion is correct, but nobody needed to use an opaque simulation model to get there. Thirteen years ago, I explained it using a simple table...