America's
Fiscal Exceptionalism Is All Too Real
Supposedly favorable comparisons of US public debt levels with those of Japan don't pass the laugh test. The one on the left is skating on fiscal thin ice. Photographer: Minas Panagiotakis/Getty
A common argument against concerns over the escalating public debt in the US is the comparison with Japan. Currently, American taxpayers bear the burden of a debt amounting to 123% of the country's gross domestic product, surpassing the previous high of 118% following the second world war, and the figure is only increasing. While this may seem alarming, critics are quick to highlight Japan's public debt, which stands at a staggering 250% of GDP. Interestingly, this level has remained stable in recent times, showing no signs of imminent fiscal collapse.
Debunking the Myth
Contrary to popular belief, a debt ratio of 250% is not only sustainable but also appears affordable, as evidenced by Japan's situation. With no indications of a fiscal crisis on the horizon, perhaps it's time for those concerned about the escalating US debt to reconsider their stance and cease fretting unnecessarily.