Anyone who makes alarmist claims about debt by talking about trillions of dollars as opposed to, say, percentages of gross domestic product, is engaged in scare tactics, not serious discussion.–Paul Krugman, “The future of taxes”
“We have to get spending pointed in the right direction. You wouldn’t run a business or your household like this. We can’t run the federal government like this. Our grandkids can’t pay off what we’ve already charged on the card. Unless we get more in the direction of a balanced budget in the next decade we’re going to have real troubles as a country. This is how empires fall.”–Rep. Langworthy quoted in “The Post Journal”
Rep. Langworthy is a political operator with no knowledge of economics; this is obvious from his statement.
- The Federal Government isn’t a business or a household.
- Grandkids (or anyone) will never need to pay off the national debt.
- The national debt isn’t charged on a credit card.
- A balanced budget is neither necessary nor desirable.
- America isn’t an empire; we have no emperor.
- Empires fall when rulers and oligarchs take too much, leaving most with too little.
A balanced budget is possible when times are good, as they were during the Clinton Administration. Debt can be reduced when times are good, and revenue is sufficient; it can’t be reduced by cutting taxes. Taxes are necessary and should fall mostly on those who can afford to pay. Reducing debt when the economy is down and there is a threat of recession is neither wise nor even possible.
Politicians will talk, spreading fear, but one needn’t believe their lies.
Unless you are incredibly rich you borrow money to buy a house and a car. Borrowing money and paying it back in the future (carrying debt) is EXACTLY how households and businesses are run. This guy has no clue.
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