Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
Why Government Debt Is Not Free Money
Episode 76 of The Fiscal Policy Podcast explores the hidden costs of government debt. Lucas and Luna break down the concept of fiscal space, using Japan's debt-to-GDP ratio of over 250 percent as a case study. They explain how servicing debt crowds out public investment, why low interest rates don't make debt free, and what happens when market confidence wavers. Specific examples include Japan's lost decades and the European debt crisis, with a focus on the trade-offs between borrowing and spending. The episode also touches on modern monetary theory and why it may overstate the…
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