US sustainability revisited
Public debt dynamics in the United States are beginning to get interesting
WE PREVIOUSLY NOTED the potential for a structurally higher yield curve to feed interest payments in coming years in the United States—perhaps tripling interest payments in percent of GDP. Eighteen months on, fiscal dynamics in the US have grown in prominence as recognition that “i minus g” may be shifting. Only last week Olivier Blanchard pointed out that primary balance adjustment may now be necessary for sustainability in many countries.
It’s therefore worth updating the projected drivers of US public debt.
