A former International Monetary Fund (IMF) chief economist blamed the U.S. debt issue partly on partisan politics in Washington.
Raghuram Rajan spoke Wednesday during the World Economic Forum (WEF) Summit in Davos, Switzerland.
"The size of the debt has gone up tremendously," Rajan said during a panel discussion, Yahoo reported. "Part of the problem that's going on is clearly there is a fractured political consensus in many industrial countries — I mean, that is part of the reason the U.S. overspent. Every constituency got a share of the spending simply because they couldn't make choices."
Rajan also criticized President Joe Biden's climate spending plan, which includes a range of subsidies such as $3.6 billion in credit subsidy to the Department of Energy for innovative clean energy technologies.
"We just saw the Inflation Reduction Act that is full of incentives. This is yet another place where fiscal [policy] needs to think very hard," Rajan said, India's ThePrint reported.
"Are we going to take the easy route and not impose some of the costs of the [green energy] transition on the private sector? Are we going to take it all on the public sector balance sheet, meaning the public sector balance sheet will have yet more burdens going forward?"
Rajan said the U.S. was not the only place where fiscal discipline has broken down and government spending is "highly untargeted." He cited the expenditure on energy taking place in Europe in the wake of the Russia-Ukraine war.
"Why has fiscal discipline broken down? One argument is that we've had all these extraordinary crises," said Rajan, referring to the 2008 financial crisis, COVID-19 pandemic and the Ukraine conflict.
Rajan also predicted that fiscal and monetary policies will be more in conflict than in "coordination" in the long-term, ThePrint reported.
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