Aside from a few notable exceptions, those who championed the notion that debt is a free lunch have not acknowledged the likelihood of a new reality. At a recent conference, I listened to a well-known financial commentator who had been a staunch advocate of the “lower for ever” narrative and seemed unaware that it had been thoroughly debunked. When pressed, they conceded that if interest rates do not quickly revert to the ultra-low levels of the 2010s, budget deficits might matter after all. But they were reluctant to admit that the existing debt overhang could pose a problem, as this would impugn their previous endorsements of spendthrift fiscal policies.
An excellent description of the policy suggestions of Professor Murphy. Now of course Mr. Rogoff has never heard or Professor Murphy – well, OK, maybe, but if so only to giggle – but it is a damn good description of the delusions, no?
It would not surprise me to learn that Murphy had played Ken Rogoff at chess once and that Murphy had won.
It would not surprise me to hear Murphy claim that he’d beaten Magnus Carlson, Fabiano Caruana and Hikaru Nakamura simultaneously.
Blindfolded.
Whilst suffering from his 17th case of COVID.
The man is a nasty and ignorant c*nt.
Most people don’t realize that the ultra low interest rates of the last 15 years were a deliberate policy. We will not return to them unless the powers that be think it is in their best interest. My guess is that they will take the easy path and inflate away the debt they have accumulated.