Watch: R versus G & the National Debt
On October 31, 2023, CRFB’s senior policy director Marc Goldwein hosted a virtual discussion on the relationship between R and G and what recent changes mean for the country’s fiscal future. (See a helpful X thread explaining the relationship here.)
A nation’s debt dynamics are largely driven by the interest rate it pays on its debt (R) and the growth rate of its economy (G). When interest rates were below the growth rate (R<G), the U.S. could run modest primary (non-interest) deficits and still keep the national debt at bay. But with interest rates surging to a 16-year high, the U.S. national debt is on an increasingly unsustainable path.