1/5: Should we worry about the debt? With $484B more stimulus, deficit will hit a post-war high & debt by 2022 will match post-war record. McConnell frets. Should he? My column answers: wsj.com/articles/the-d… Thanks to @budgethawks for figures and @asincopado for charts. 
2/5: Long-and short-term interest rates have plunged to between 0% and 1% since pandemic began, and will likely stay low for years more. (Thanks to @csm_research for rate forecast). That completely offsets effect of higher debt on debt service. Ergo, sustainability unaffected.
3/5: I’m not saying this much debt is necessary or being used optimally; that's a topic for a different column. But debt does harm by crowding out private investment and that hasn’t been happening for years, and looks unlikely for years more.
4/5. Could inflation result, especially with Fed “monetizing” 40% of this year’s deficit? Probably not for years: breakevens aren't worried. But if inflation does threaten to top 2%, the Fed might actually welcome that. & it knows how to fix it: raise interest rates.
5/5 But w/ debt so high, Fed could feel political pressure not to tighten. @ojblanchard1: “As long as people like Jay Powell are in charge, I don’t worry too much. But suppose Trump is re-elected and he puts someone in charge at the Fed who is more inclined to yield to pressure.”
