The U.S. is inviting a debt shock if it continues on its current trajectory, which is starting to look like unsustainable student loans, according to Jared Bernstein, who previously served as the chair of President Joe Biden’s Council of Economic Advisers.
In a New York Times op-ed on Wednesday, he acknowledged that he was once a longtime dove when it came to budget deficits and previously argued that fiscal austerity often does more harm than good.
“No longer. I, like many other longtime doves, am joining the hawks, because our nation’s budget math just got a lot more dangerous,” Bernstein wrote.
In particular, he pointed to the math around economic growth versus debt interest. Governments can sustain budget deficits if GDP expands faster than the interest rate on their debt, Bernstein explained, citing research from economist Olivier Blanchard.
That’s where the student debt analogy comes in. College graduates…
