causal
Partisan Debt Ratchet Theory
Debt keeps piling up because of a partisan dynamic (per Alesina-type models): when the liberal party is in power it spends and borrows because it may lose control in the future, and when conservatives are in power they cut taxes and build up debt—so whoever is in power says don't pay attention to the debt, producing the ratchet we see today.
causalpending
Speaker
Kenneth RogoffEvidence Quote
“I think that’s a very, very powerful theory of part of why debt builds up is, whoever is in power says, “Don’t pay any attention to it.” Of course, I think we end up where we are now.”
Created: 6/13/2026, 3:28:48 AM
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