• How expensive is it to service the national debt?: A battle between interest rates and growth rates

    14 days ago - By FRED

    The U.S. federal debt has been rising steadily since the Great Recession and is currently 103 percent of GDP. So let's enlist FRED to help us study the sustainability of this debt by looking at how much it costs to service it.
    Neil Mehrotra recently described the cost of servicing public debt as dependent on the gap between the real interest rate on debt and the growth rate of real GDP: This gap captures the difference between the interest the government must pay to its lenders, in real terms, and the pace at which U.S. income increases. If U.S. income increases more rapidly, then interest...
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  • Reducing U.S. Immigration Could Slow Economic Growth, Says Fed Chairman

    14 days ago - By Fortune

    Federal Reserve Chairman Jerome Powell, in written responses to a Democratic senator, said reducing immigration could slow the economy over the longer run by limiting growth in the U.S. labor force.
    The comments came in a written response to Senator Catherine Cortez Masto, a Nevada Democrat who asked Powell if he agreed with pro-immigration comments by Minneapolis Fed President Neel Kashkari. Kashkari, whose parents came from India and wife is from the Philippines, called immigration "as close to a free lunch as there is" for the American economy, according to a Wall Street Journal opinion...
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