The True Cost Of Government Debt

Summing up, the main cost of government debt has very little to do with the future repayment obligation it implies. If the debt is purchased by the private sector using existing money then the most important cost is an immediate reduction in productive investment, whereas if the debt is financed via monetary inflation then the most important cost will be a long-term reduction in economic progress due to the mal-investment incentivized by the new money.

1 2
View single page >> |
How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.