Ballooning U.S. debt has stirred growing alarm on Wall Street, but economist Paul Krugman isn’t worried and said you shouldn’t be either.
In a New York Times op-ed on Thursday, the Nobel laureate wrote that while $34 trillion is a record, debt as a share of GDP roughly matches levels seen at the end of World War II and is well below Japan’s current debt burden as well as the U.K.’s postwar level, neither of which triggered a debt crisis.
Most historical examples of debt crises took place in countries that borrowed in another country’s currency, he added.
To be sure, debt has been soaring for decades. But those worried about U.S. debt levels today note that while it surged during the pandemic emergency when the federal government sought to prop up the economy, debt has continued to pile up without a comparable emergency, not to mention a global calamity on the scale of World War II.
Meanwhile, the trajectory of deficits and debt in the…
