How much does the deficit even matter? I know interest payments are a couple hundred billion a year but I don't really know 1) how big a deal that is, and 2) what the actual effects of those payments are.
Debt to gdp level keeps going up so it's hard to argue that there isn't something wrong, even if the current debt level is fine. But we have kept cutting taxes and having recessions. Some of the recessions have been very bad.
The debt is a savings device called treasury bond. There are other savings devices but US government debt is the largest single thing. The stock market is larger but consists of thousands of things. If you want to reduce the debt, you have to reduce people's savings. You can do that by taxing more, or people can voluntarily spend their savings. Nearly every time money changes hands, there's a tax. So the government will recover money it spends eventually. It's just a matter of getting money to change hands enough times, or increasing tax so that it does not need to change hands as many times. The government borrows money for 30 years at about 4% right now which is very low, so I think it will recover the money it spends. Wealth is very concentrated so debt reduction would probably reduce wealth inequality. Like I said, reducing the debt will require higher taxes and avoiding recessions. It's not bad for people to have savings but it shouldn't all be sitting in a few people's bank accounts.
How much does the deficit even matter? I know interest payments are a couple hundred billion a year but I don't really know 1) how big a deal that is, and 2) what the actual effects of those payments are.
Debt to gdp level keeps going up so it's hard to argue that there isn't something wrong, even if the current debt level is fine. But we have kept cutting taxes and having recessions. Some of the recessions have been very bad.
The debt is a savings device called treasury bond. There are other savings devices but US government debt is the largest single thing. The stock market is larger but consists of thousands of things. If you want to reduce the debt, you have to reduce people's savings. You can do that by taxing more, or people can voluntarily spend their savings. Nearly every time money changes hands, there's a tax. So the government will recover money it spends eventually. It's just a matter of getting money to change hands enough times, or increasing tax so that it does not need to change hands as many times. The government borrows money for 30 years at about 4% right now which is very low, so I think it will recover the money it spends. Wealth is very concentrated so debt reduction would probably reduce wealth inequality. Like I said, reducing the debt will require higher taxes and avoiding recessions. It's not bad for people to have savings but it shouldn't all be sitting in a few people's bank accounts.