A month ago, in the New York Times, Paul Krugman wrote a column labeled “The Fiscal Fizzle — An Imaginary Budget and Debt Crisis.” Speaking to those who are worried about the size of our national debt, he said, “We don’t have a debt crisis, and never did. Why did everyone important seem to think otherwise?”

Krugman begins his analysis by comparing the current debt-to-GDP [gross domestic product] ratio to historic levels. He says the rate at which our debt is rising is nothing to worry about because even if it continues to go on at the same rate for 25 years, it “is projected to be no higher, as a percentage of GDP, than the debt America had at the end of World War II, or that Britain had for much of the 20th century.”

World War II is hardly the benchmark I would choose. Paying for it drove America’s debt to unprecedented highs and drove Britain into bankruptcy. After it ended, our post-war boom cut our debt-to-GDP ratio by two thirds, but Britain never really recovered. To say that both nations will be in the same fiscal fix in 2039 as they were in in 1945 is frightening rather than reassuring. No financial “peace dividend” similar to the one that began in 1946 will be available in 2040.

Next, with respect to interest rates, Krugman apparently believes the following:

When a nation’s debt rises excessively, so do expectations of inflation. Inflation decreases the purchasing power of dollars held by its bondholders. Investors will not buy any more securities from that nation unless they get a premium return on their investment. That means higher interest rates.

So, he reasons, if investors are currently willing to buy a nation’s securities at low interest rates, the nation’s debt is under control. American interest rates are lower than they have ever been, which shows we are not in trouble. To drive the point home, he goes abroad. “Did you know that Italy, which remains deep in debt and suffers much more from the burden of an aging population than we do, can now borrow long term at an interest rate of only 2.78 percent? Did you know that France, which is the subject of constant negative reporting, pays only 1.57 percent?”

The economists whom I trust disagree. There can be a different reason why interest rates are low. The current fear in the world is not inflation but deflation, a situation where a nation’s economy hits bottom and struggles to recover. Forget Greece as an example; it’s too small and has had too many internal structural problems to be taken as a model for us. Take Japan instead, a highly developed nation once seen as poised to take over the world. After going into deflation, roughly two decades ago, it has run up a debt-to-GDP ratio more than twice ours while trying to get out of it. It still hasn’t made it.

Krugman looks at interest rates in Italy, Spain and Japan and is reassured. I look at their stagnant levels of economic activity and am alarmed, particularly because they are not alone. The world is awash in debt — companies and individuals as well as governments. Debt can be beneficial — it empowers us to buy a home, get an education, start a business or win a war — but when it gets too big to be serviced easily, as it seems to be at the moment, it can drag down everyone and everything it touches, including a nation’s economy.

The issue a not a “fizzle” or imaginary; the crisis is real.

Robert Bennett, former U.S. senator from Utah, is a part-time teacher, researcher and lecturer at the University of Utah's Hinckley Institute of Politics.