Passengers wearing face masks wait for their bus in front of a national debt display on Pennsylvania Ave. NW in Washington on Monday, May 18, 2020.Even as we deal with the economic problems of the pandemic, there's another crisis looming: our national debt.
I often wonder whether economists really understand the nature of debt, because borrowing is not just an economic concept — I believe it is a philosophical one that has economic implications. When you exercise, you experience some level of pain, but you know that the pain leads to something good. Some medicines don't taste good, but they are good for you. Studying in school is not always pleasant, but hopefully it leads to more knowledge — a good. Within limits, most of us would agree that exercise, good medicine and studying are clearly good things. There are also things that seem or feel good but may not be good for you.
For example, if I own a business and I can borrow money to build or make something that produces economic value, and the cost of the debt is exceeded by the value of what is produced , then debt is good. Most people would agree with this even though we can't know for sure whether the cost of debt will be exceeded by the value from deploying it.
A rising proportion of what we pay in taxes is going only to mandatory spending, fixed payments on programs like Medicare or financial items like the interest on our outstanding debt that must be funded regardless of the health of the country or our economy. As of now, our country must payof our tax dollars simply to meet fixed obligations that cannot be reduced. In 1962, it was about 32%.
brianhamiltonnc Debt on a country level is a myth. It could be set to zero at any time by the one who controls the printing press
brianhamiltonnc Sounds like a Republican playbook... Blame the democrats!
brianhamiltonnc Obviously, he hasn't read The Deficit Myth.
brianhamiltonnc surely someone at this trash publication can show the witless scrub, Brian, a debt service ratio
brianhamiltonnc