While the national debt is now almost as large as the economy, supporters say the benefits of spending big now outweigh the costs of higher debt. In Europe, pandemic spending has so far largely focused on floating people and businesses through the crisis. But, he said, “at some point you ask yourself, ‘How are we going to pay for all this?’”For now, such spending is affordable. And government debt may never have to be fully paid back if central banks keep buying it. But some economists worry that inflation and interest rates could rise if stimulus investment revives growth too rapidly, forcing central banks to put a brake on easy-money policies.

Source: New York Times February 17, 2021 21:33 UTC