Heyo, national economies need to run at a deficit. The amount of debt needs to be maintained but running a negative is a good thing because the interest payments become stable capital injection. These regular, anticipated payments build the confidence of very conservative money managers to spend their own money. It’s trickle down but in a way that helps increase the likelihood of money being spent, which is basically the GDP. And the speed of people spending money in the system is a metric that central banks use to set interest rates.
It’s all connected and that’s why running a deficit, a (relatively) small one, is a good thing. Nations don’t use checkbook accounting.
I never said we should have zero debt, that’s a strawman. Most economist recommend a moderate amount of debt due to various positive effects (some of which you mention). So the real disagreement comes here:
It’s all connected and that’s why running a deficit, a (relatively) small one, is a good thing.
The implication being that you think the U.S. has a (relatively) small amount of debt. Now, I am willing to be convinced otherwise, but I do not think that the U.S. currently has a small amount of debt. Our debt to GDP ratio is higher than other developed nations, which is concerning.
I do concede that we aren’t in danger of a debt crisis on the scale of Greece or Sri Lanka. But ~$34 Trillion in debt needs to be part of the discussion when we keep praising the economy.
Heyo, national economies need to run at a deficit. The amount of debt needs to be maintained but running a negative is a good thing because the interest payments become stable capital injection. These regular, anticipated payments build the confidence of very conservative money managers to spend their own money. It’s trickle down but in a way that helps increase the likelihood of money being spent, which is basically the GDP. And the speed of people spending money in the system is a metric that central banks use to set interest rates.
It’s all connected and that’s why running a deficit, a (relatively) small one, is a good thing. Nations don’t use checkbook accounting.
how much of this still applies when the debt is as big as the United State’s current debt? (genuine question)
I never said we should have zero debt, that’s a strawman. Most economist recommend a moderate amount of debt due to various positive effects (some of which you mention). So the real disagreement comes here:
The implication being that you think the U.S. has a (relatively) small amount of debt. Now, I am willing to be convinced otherwise, but I do not think that the U.S. currently has a small amount of debt. Our debt to GDP ratio is higher than other developed nations, which is concerning.
I do concede that we aren’t in danger of a debt crisis on the scale of Greece or Sri Lanka. But ~$34 Trillion in debt needs to be part of the discussion when we keep praising the economy.
At this point, I just use someone complaining about the national debt as a secret code for them saying “I have zero idea how economics works”.