The Economic Costs of the National Debt and How to Avoid Them

In Analysis by Michael Rae

One week ago, noted Stanford University economist John Taylor testified at a hearing before the U.S. House of Representatives’ budget committee, whose members are reexamining the economic costs of the national debt.
After the hearing, Taylor summarized his remarks and reflected on previous testimony he provided on a related topic back in 2015:
At the earlier hearing I showed that basic economic theory grounded in real world data implies that high federal government debt has a cost: it reduces real GDP and real income per household compared to lower debt levels. At yesterday’s hearing I reported that a reexamination of the economic

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