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What we care about at the end of the day is bottom line economic growth, specifically GDP per capita growth. Whether government debt is more or less expensive is a collateral matter. It just means you need to make different choices in taxation versus borrowing—as long as the end result is the same how does it matter?

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Cost of capital is a direct input to growth (from both investment and consumption). The more expensive it is to borrow, the lower future growth is, and the cost to borrow is increasing. This means taxation must go up if you want higher potential future growth through reduced cost of capital.

Bond yields go up (ie government debt)->consumer debt costs and cost of capital for business investment goes up (all consumer debt is priced off of "risk free" gov debt)->consumption slows->growth is reduced

> Cost of capital is a direct input to growth (from both investment and consumption). The more expensive it is to borrow, the lower future growth is, and the cost to borrow is increasing

Right, which gets back to my point that US GDP per capita growth has been incredibly stable from 1830 to present, both before it had an empire and cheap borrowing and since it’s had an empire and cheap borrowing.

What we care about and what the exorbitant privilege is referring to can be different things.

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