Debt-to-GDP is a misleading metric because GDP can be artificially inflated by government spending and increased debt (pushing up the denominator), while interest expense is a better measure of fiscal sustainability because it represents actual cash outlays.

normativepending

Speaker

Daniel Laería

Evidence Quote

Debt to GDP is a very bad ratio because GDP can be bloated with more government spending and more debt so the denominator gets pushed up...interest expense is so important

Source

Hedgeye Investing Summit Fall 2024 | Daniel Lacalle, Chief Economist at TressisHedgeye
Created: 8/12/2026, 6:00:34 PM

My Notes

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