Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How Public Debt Becomes a Hidden Tax on Growth
When governments borrow, they don't just issue bonds — they change the incentives for everyone who lends, spends, and invests. This episode unpacks the underappreciated mechanism of financial repression: how central banks and treasuries quietly keep interest rates below inflation, eroding the real value of government debt. Lucas and Luna walk through the classic examples, from post-war America to today's quantitative easing, and ask whether the strategy still works when inflation runs hot. They also examine the trade-off between cheaper borrowing and the silent hit to savers, and…
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