In 2020, The US authorities borrowed $3 trillion in response to the financial injury brought on by the COVID-19 pandemic. Within the subsequent few weeks, Congress is more likely to cross a reduction invoice that may lead the federal government to borrow one other $1.9 trillion.
If that quantity of borrowing appears insane, that is as a result of it’s. Or no less than, it was once. Till not too long ago, the federal government fearful that borrowing an excessive amount of would harm the financial system by driving up inflation and rates of interest.
Now, the US borrows extra money than ever, however rates of interest for treasury bonds do not budge and inflation stays low. Someplace alongside the best way, it appears, there was an enormous shift in the best way deficits and rates of interest work.
Right this moment on the present, when all the things modified. Why the federal government stopped being afraid of borrowing. And the way we make sense of this new world.