“Debt” is a scary, four-letter word used too often as a political weapon. Candidates attempt to draw in voters by fear-mongering about our “crippling”, “out-of-control” national debt- and it works. Debt is something we’ve all been trained to fear; at a personal level, and a national one. But the reality of national debt isn’t nearly as terrifying, or even as consequential, as it’s made out to be.
You see, debt at the national level isn’t the same as personal debt. It isn’t “repaid” in the same way, and there’s a reasonable argument to be made that it isn’t a problem at all; even, that it’s a good thing.
Obviously, issuing debt is a way to pay for things we need. The US is ailed by considerable deficiencies in infrastructure, the likes of which can only be solved with funding. Debt is a good way to get extra funds in the short term.
But the aspect of debt that we worry about is “paying it off”. That fear stems from a fundamental misunderstanding of how national debt works. It isn’t, like I said, the same as personal debts. The majority of our national debt is money that we’ve borrowed from ourselves, and it doesn’t need to be paid back like our personal debts do. Robert J. Stonebraker of Winthrop University explains it nicely:
“ Most government debt is in the form of short-term Treasury bills that mature every 90 days. When one set of Treasury bills matures, the government simply pays them off by selling more. As long as it offers competitive rates of return on “safe” bonds, the government will be able to refinance or “roll over” its debt indefinitely. As a result, we need not worry about burdening our children with repayment. They won’t repay the debt. Like us, they will refinance and pass it on.”
You needn’t worry about your children and your children’s children being buried under the burden of repaying $19 trillion plus in national debt- they won’t have to. It’s unlikely that any future generation will. There isn’t any nominal or foreseeable point at which our debt starts to bite. In the unlikely event that there comes a time when it all comes crashing own on us, it isn’t as if there aren’t solutions. But fear not; other countries, like Britain, for example, have been in debt for centuries and have amassed significantly more debt per capita than the US, and they’re still doing alright.
Moreover, a decent amount of debt is necessary for our economy to function. Some economists even argue that we aren’t deep enough in debt- that it would be beneficial to our economy to accumulate even more. Alexander Hamilton said it best:
“A national debt, if it is not excessive, will be to us a national blessing.”
And don’t worry, our debt isn’t quite excessive. $19 trillion is a big number, but it isn’t terribly extreme for a country of our size, and it’s to be expected following the most recent recession. And, in terms of per-capita debt and percent of GDP, our debt isn’t as high as a lot of other countries.
In conclusion, the fear-instilling “crippling debt” argument is an empty one. So, do your research, understand the issue, and most importantly, stop worrying about it. Seriously.