Will High Interest Rates Trigger a Debt Disaster?
Once again, larger deficits and higher debt-to-GDP ratios in rich countries have become fodder for fiscal hawks and bond vigilantes to warn of a looming crisis that will demand a return to austerity. But the case for such pessimism has no logical or historical basis.
https://prosyn.org/Rc4AO7q
AUSTIN – In a recent commentary for the Financial Times, Martin Wolf trots out the specter of a “public-debt disaster,” that recurrent staple of bond-market chatter. The essence of his argument is that since debt-to-GDP ratios are high, and eminent authorities are alarmed, “fiscal crises” in the form of debt defaults or inflation “loom.” And that means something must be done.