When is a high level of public debt optimal in the long term?

H igh public debt ratio s in many large OECD countries result from the choice to boost demand in these countries since the crisis. But are there situations where a high public debt ratio is optimal from a long-term perspective ? This is the case if there is an excessive level of private sector savings, which, if they were lent to the private sector, would lead to overcapitalisation ( above-optimal capital) and therefore to an abnormally low return on capital . The increase in the public debt then absorbs a growing share of private savings and prevents private sector overcapitalisation. Does this explanation apply to the current rise in the public debt ratio in OECD countries? Are there signs of private sector overcapitalisation? The answer is no. While capital intensity has risen , this is not the case of private savings , and the return on capital has risen. So this is no justification for the rise in the public debt ratio .