Debt maths can’t be bucked
HORROR STORIES about public debt are a commonplace. Spending other people’s money comes more easily to politicians than imposing extra taxes. The natural response to a sudden and unexpected emergency — such as that posed by the Covid-19 pandemic — is to expand the budget deficit and to let the public debt increase.
The trouble is that interest on the debt is part of government expenditure. A big deficit this year implies a large increase in the debt, and a large increase in the debt results next year in
