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Beware the Boiling Frog: The Fiscal Blind Spot
The fading presence of deficit hawks and bond vigilantes raises questions about fiscal responsibility amidst increasing government debt. While the analogy of the boiling frog highlights complacency in managing the deficit, current demand for U.S. government treasuries keeps concerns at bay for now. Historical studies on the impact of high debt-to-GDP ratios present conflicting viewpoints, suggesting that while high debt levels can hinder growth, this has not always been the case in recent history. The debate remains unresolved, emphasizing the necessity for prudent fiscal policy and awareness of long-term implications.