Life is a struggle between the urgent and the important. With the accelerating inanity of our daily lives — through algorithm addiction and the flatulent con man occupying the White House — the important is always overwhelmed by a tidal wave of screeching tweets and self-inflicted wounds.
That’s why you probably missed an obscure but important milestone our country hit last week: America’s debt passed 100 percent of our gross domestic product.
So what, you say? That sounds boring and technical. It’s actually really fucking important. It means that America’s accumulated debt — our impulse to borrow from other people to pay for the things we want and need — is now larger than the total size of the American economy. It shouldn’t take an economist to recognize this as bad and definitionally unsustainable.
The last time our deficit passed 100 percent of GDP, it was World War II. But when countries pass this milestone in ordinary times, it is a formula for decline that has accompanied the fall of republics and empires alike.
America’s accumulated debt — our impulse to borrow from other people to pay for the things we want and need — is now larger than the total size of the American economy. It shouldn’t take an economist to recognize this as bad and definitionally unsustainable.
Apparently it should take an economist, because that’s not what national debt is.
Central banks don’t exactly “borrow”. They have the authority to print money into existence, so they don’t need to get money from someone else in order to spend it.
The only reason interest-bearing financial instruments come into the picture is because it’s really disruptive to spend a billion dollars into existence all at once. It’s much better to spread it out over time.
And touting Clinton’s surplus as a boon to the economy…
History tells the tale. The federal government has achieved fiscal balance (even surpluses) in just seven periods since 1776, bringing in enough revenue to cover all of its spending during 1817-21, 1823-36, 1852-57, 1867-73, 1880-93, 1920-30 and 1998-2001. We have also experienced six depressions. They began in 1819, 1837, 1857, 1873, 1893 and 1929.
Do you see the correlation?
The one exception occurred in the late 1990s and early 2000s, when the dot-com and housing bubbles fueled a consumption binge that delayed the harmful effects of the Clinton surpluses until the Great Recession of 2007-09.
Austerity is a misdirect. We do need to tax the wealthy, and stop excessive spending on parasitic special interests. But we don’t need to pursue a balanced budget, and we shouldn’t be shy about spending on things that will genuinely boost productivity, like green energy and universal health care and jobs guarantees.
the only reason to not have a balanced budget is to let the wealthy off on taxation like they have been doing since reagan. we should collect what we spend.
