This very bad column, with its assertion that "There is a lot of frustration among economists and policymakers about the seeming unwillingness of young Americans to appreciate the enormous threat posed by deficits and debt," is a teachable moment 1/ brookings.edu/opinions/why-a…
The author contrasts millennial alarm over climate change with lack of attention to debt. So maybe the first thing to say is that Olivier Blanchard, who tells us with great authority that debt risks are exaggerated, is not a millennial 2/ piie.com/blogs/realtime…
Neither, of course, are Larry Summers or yours truly. All of us have concluded based on data and hard thinking that debt isn't the kind of existential threat a lot of Beltway types claim that it is 3/
It's not just that with interest rates below growth rates, debt won't snowball. Also, public debt is NOT borrowing from the future. Unless it displaces investment — which there's no sign it's doing — it just creates claims by one part of the population on another part 4/
That is, taxpayers owe interest to bondholders. This can create some problems, but it doesn't reduce the future income of society as a whole. So running budget deficits is nothing at all like emitting greenhouse gases 5/
Emissions will stay in the atmosphere for generations, raising global temperatures all the while. So every year we fail to act really does damage our future, perhaps irrevocably. It takes willful misunderstanding not to get the difference between that and deficits 6/
In other words, the millennials are right and the debt scolds are wrong — wrong conceptually, wrong empirically. 7/
Look, I'm 66, so I guess I'm obliged as part of the social contract to be annoyed at millennials. The music in restaurants is too loud! They stand still on subway stairs, texting! But on policy, the Greta Thunbergs of the world are far wiser than DC's Very Serious People 8/
