America’s reckless borrowing is a danger to its economy—and the world’s

If prudence is a virtue then America’s budget is an exercise in vice. Over the past 12 months the federal government has spent $2trn, or 7.2% of GDP, more than it has raised in taxes, after stripping out temporary factors. Usually such a vast deficit would be the result of a recession and accompanying stimulus. Today the lavish borrowing comes despite America’s longest stretch of sub-4% unemployment in half a century. The deficit has not been below 3% of GDP, an old measure of sound fiscal management, since 2015, and next year Uncle Sam’s net debts will probably cross 100% of GDP, up by about two-fifths in a decade. Whereas near-zero interest rates once made large debts affordable, today rates are higher and the government is spending more servicing the debt than on national defence.