"The Red Pill Magazine" Column 〈An Economist's View〉

May 6, 2025

The Debt Crisis That Never Came: A Long-Standing Misconception in Economic Theory

There is much talk about how severe the U.S. fiscal deficit is and the impending U.S. debt crisis, but over the past ten quarters, the yield on ten-year bonds has fluctuated within a range of 3¼ to 4¾, making it unclear where the so-called crisis is coming from. The famous book "This Time is Different" by two authors, who analyzed data from dozens of countries over a hundred years, suggested that once debt exceeds 90% of GDP, economic growth would sharply decline.