Is Paying Down Government Debt Bad for the Economy?

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Tags: Value and Exchange, Booms and Busts

11/02/2025 Robert P. Murphy

Is paying down the federal debt a recession trigger? Bob takes on the MMT claim and checks the record, citing US debt payoffs, Canada’s 1990s reforms, and ECB case studies. Conclusion: real wealth beats accounting tricks and paydowns aren’t a mechanical path to recession.

Read More on Fiscal Austerity: Mises.org/HAP524a
The Upside-Down World of MMT: Mises.org/HAP524b
Do Balanced Budgets Cause Depressions?: Mises.org/HAP524c

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