Question of the Day

Do national debts that exceed 90% of nations' economies generally harm economic growth?



Correct Answer

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Considerable (but not definitive) evidence indicates that national debts beyond 90% of nations' economies harm economic growth. The U.S. national debt passed this level in 2010, and since then, economic growth has been significantly below average. Many media outlets have reported on research said to prove that large national debts don't harm economic growth, but this research actually showed what previous research had found: economic growth decreases by an average of about 30% when government debt exceeds 90% of an economy. The authors of this research, however, buried this data deep within their paper and published a misleading overview, which the media uncritically parroted.

DocumentationNational Debt ConsequencesU.S. Economic Growth