With six months to go before the US presidential election, US public debt is more than ever the elephant in the room. The subject is inescapable. It represents an intrinsic threat, but both Democrats and Republicans pretend to ignore it. The world’s leading economic power is in dazzling form, with Europe on the defensive and China facing a problematic slowdown. But behind its undisputed financial leadership, insolent growth and rock-bottom unemployment rate, the other side of the fiscal coin is dizzying.
The public deficit is one of the main fuels of a permanently overheated expansion. Over the last five years, the federal deficit has averaged 9% of GDP. This is four times the average since 1945, and nearly double the average for other advanced economies. In its latest projections, the…
