Debt and Tax Cuts - Paul Krugman | Substack
Economist Paul Krugman argues that the current U.S. national debt crisis is primarily driven by historical tax cuts enacted by Republican administrations rather than excessive public spending. He challenges the narrative that current debt levels signal an imminent fiscal collapse.
Why it matters
Understanding the drivers of national debt is central to ongoing debates regarding fiscal policy, taxation, and the economic platform of major political parties.
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Federal debt is in the news. There were many headlines last week about the debt exceeding $40 trillion and now being bigger than the economy. There were also headlines about rising interest rates on long-term debt and the showy, ineffectual attempt of Scott Bessent, the Treasury secretary, to manipulate them down.
Some of this is hype. Properly measured, debt is “only” $32 trillion. The comparison with GDP involves apples and oranges. And as I argued the other day , rising rates do not signal an imminent fiscal crisis.
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