The basic way America has always reduced the debt to GDP ratio is by expanding the economy. As Macaulay noted, that’s also the way Britain has done it. GDP growth makes even large debts manageable. When the economy is cooking, more people have jobs and better wages. So they pay more taxes. And they require less unemployment assistance and other social insurance.

That’s why it’s so important now that government steps in and runs large deficits. Without large deficits this year and next, and perhaps even the year after, the economy doesn’t have a prayer of getting back on a growth path. In that case, the debt-to-GDP ratio could really get ugly.

Which brings me to the only item in last week’s White House budget report worth looking at. It predicts that the government will have a deficit of nearly $1.6tn in the fiscal year ending on 30 September. This number worries me not because it’s so large, but because it’s small. I’d prefer the government to run a larger deficit this year.