I don&#x27;t think the case that large debt destroys growth is as open and shut as you seem to imply.<p>You mention debt destroys growth by reducing available capital.  This is because the government&#x27;s borrowing of money increases the demand for capital.  The government&#x27;s increased demand for capital can drive up the price of capital to the point where many private enterprises can&#x27;t afford it.  This is called crowding out.<p>The price to borrow capital is the interest rate.  If you look at the problem in Japan and most of the developed world you find remarkably low interest rates.  This tells us that we don&#x27;t have a scarcity of capital and a surplus of opportunities but a glut of capital and a drought of opportunities.  We have a large supply of capital and not enough places to use it.<p>If capital was like any other good it would fall to market clearing levels.  The problem is that there is an arbitrary price floor on capital.  You can&#x27;t charge anyone less than 0% interest.  Which gives you a price floor of a real interest rate of 0% - inflation.  This is why so many countries are trying to get inflation.  Because if we can get an inflation of 4% we can have a real interest rate of -4% and reduce the price floor on capital.