Economist on US debt: 'The problem is we're not resilient'

October 11, 2026 - 16:10

Kenneth Rogoff, the former chief economist at the International Monetary Fund, has changed his view on the risks posed by America's rising debt. He once feared that high borrowing would drag down economic growth. Now he sees a more serious threat: the country's ability to withstand a crisis.

Rogoff's shift reflects a broader unease among economists. The issue is not just the size of the debt, which has climbed past 120 percent of GDP. It is that the United States has fewer tools to respond when the next recession or financial shock hits. Interest rates are already elevated, and political gridlock makes fresh fiscal stimulus hard to pass.

In the past, America could rely on low borrowing costs and global demand for Treasuries. That cushion is thinner now. If investors start to question the country's creditworthiness, the consequences could be severe. Borrowing costs would spike, forcing painful cuts to public services or sharp tax increases.

Rogoff argues that resilience, not just growth, should be the focus. A country with high debt but strong institutions and a dynamic economy can absorb shocks. A country with high debt and weak political consensus cannot. The warning is clear: the danger is not a slow decline, but a sudden loss of confidence when it is least affordable.