Debt & Deficits

Do higher marginal tax rates materially increase federal revenue? Behavioral responses among high-income taxpayers, the impact of enforcement capacity on compliance, and other implications of restoring pre-2017 tax rates all affect the results. The discussion highlights how income adjustments and structural deficits may limit the effectiveness of rate increases. With annual federal deficits exceeding one trillion dollars in recent years, constrained revenue elasticity, combined with elevated spending, could affect investor confidence and long-term demand for US dollars.

Japan’s post-1989 experience provides a long-running case study on the limits of monetary and fiscal stimulus. After the collapse of a combined equity and property bubble, Japan relied on sustained deficits, near-zero interest rates, and repeated stimulus to stabilize growth. While markets eventually recovered in nominal terms, the process took decades and coincided with a sharp rise in government debt. In 2026, rising bond yields and higher debt servicing costs are testing the durability of this approach. The Japanese experience offers a relevant framework for assessing similar policy paths now being followed globally.

Gold’s rise to over $4,500/oz in 2025 reflects deep structural imbalances in global currency management. As inflation erodes purchasing power, gold’s share of global financial assets has begun to recover from historic lows. Central banks, particularly in emerging markets, are diversifying away from the U.S. dollar and increasing gold holdings. The U.S. government’s long-standing influence through major financial institutions is weakening as AI-driven trading and geopolitical shifts reshape the market. The reassertion of the physical gold market marks a turning point for investors evaluating the future of monetary stability.

The United States has been keeping a close eye on its trade relationships over the years. In 2023, trade deficits with many key partners were a major focus. These deficits are influenced by everything from policy changes to shifts in the global economy. While the numbers may change, the fundamental challenges frequently remain the same: striking a balance between free …

The debate in Washington over when and how to increase the debt limit is less than 100% accurate. Here are some myths about the debt ceiling and the debate about raising it.

America was once the world’s model democracy. Now it’s a global laughingstock with a government that can’t keep the lights on and is threatening to renege on its debts. How did this happen?

Going over the debt ceiling would mean the US government legally can’t pay its bills and would default on the national debt. This would be catastrophic in ways that would make Lehman Bros look like a walk in the park.

Modern Monetary Theory asserts that as long as the central bank can monetize federal debt and keep interest rates low the government can endlessly increase the amount of debt...[but] those who pretend deficits don’t matter ignore the fact that interest on the national debt will soon be the largest item in the federal budget,

How long before interest payments on the debt exceeds revenues? An cross-the-board ‘Debt Jubilee’, however, from an historical perspective shows that retiring debt can actually make a country’s economy, and its indebted citizenry, all the better for it.

Today's graphic ranks government debt by country for advanced economies, using their gross debt-to-GDP ratio.