The latest Bloomberg Businessweek offers contrasting views of the impact of the federal government’s debt on the nation’s economic growth.

One view—essentially [Kentucky Sen. Rand] Paul’s position—is that the more a government borrows, the more it competes with borrowers in the private sector. That contest tends to push interest rates higher; as a result, businesses lower investment since they can’t access financing. Lower investment means lower rates of hiring.

The theory that public debt has a psychological effect on investors plays a part, too. Nineteenth century British economist David Ricardo studied the impact of government borrowing: When it increased, he believed, consumers and businesses reacted by saving more and spending less to prepare for tax increases needed to pay off the public debt. Businesses failed to expand—and hire—out of concern that their profits would be taxed away.

Opponents of this theory say they see neither the Ricardo effect nor the crowding out of private-sector borrowing happening in a big way. Interest rates are at historic lows despite a level of public debt not seen since the 1950s. Last year the U.S. paid $220 billion in interest, or 6.2 percent of government spending overall. The Office of Management and Budget says that since 1973 the government has spent an annual average of 10.6 percent of the budget on interest.

This article brought to mind a 2011 Carolina Journal Radio interview with N.C. State University economist Thomas Grennes, whose research shows a negative impact from debt that exceeds 77 percent of a nation’s gross domestic product.