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China's digging out of a crisis, but America's luck is wearing thin – Ken Rogoff

A debt shock is coming for both China and the US.

Ken also explains how China is trapped: in order to solve their current problems, they keep leaning on financial repression and state-directed investment, which only makes their situation worse. Dwarkesh Patel 00:57:05 Does that mean US growth would have been even higher after World War II if we had just kept the government debt or figured out some other way to deal with it and let financial markets develop earlier? Traditionally, when you did a lot of investment it raised wages, but it’s possible— there are economists like Daron Acemoglu who’ve shown it can go both ways, it’s not difficult to show that—if you're really just substituting for workers, it’s making capital more valuable.

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