Will public debt be a problem when the Covid-19 crisis is over?

Financial Times/Gavin Davies

“Even more notable has been the unanimity among macroeconomists that massive fiscal and monetary stimulus is the appropriate response to a ‘wartime’ economic emergency. Almost no one seriously disputes that policy should be doing ‘whatever it takes’ to overcome the shock from the virus.”

USAGOLD note:  The short answer, according to Davies, is “Yes and no depending on your politics.”  The rubber meets the road, as we have mentioned here on occasion, when the time comes to reconcile over-extended central bank balance sheets – with the Federal Reserve (because of its strategic positioning globally) topping the list.

cartoon showing giant sinkhole of government debtCartoon courtesy of MichaelPRamirez.com

Repost from 6-22-2020

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