Is America in fiscal trouble?
Concerns about the U.S. deficit have surged,
but worries about the fiscal situation of the United States are nothing new.
So is this time really different?
I'm Allison Nathan, and this is Goldman Sachs Exchanges.
Each month, I speak with investors, policymakers,
and academics about the most pressing market-moving issues for our top-of-mind report from Goldman Sachs Research.
This month, I spoke with two people who have long worried about the U.S. fiscal trajectory.
economist Ken Rogoff, a professor at Harvard University,
and historian Neil Ferguson of Stanford's Hoover Institution and Harvard's Belfer Center.
Both agreed this time is different and are worried about the U.S. fiscal situation today.
So I started by asking them why that is.
Here's what Ken Rogoff had to say.
I think the big change is that global long-term real interest rates have risen.
In my opinion, they've normalized.
The whole stuff about lower forever secular stagnation was always wildly overblown.
And I've been debating this for over a decade,
saying that if you look at the longer-term behavior of real interest rates, they go in cycles.
but there's a lot of regression to mean,
and no one should have ever planned on there being low forever.