Since coming back to the US, I have been surprised how often the national debt comes up in conversations about most any political topic. In discussions about inequality, for instance, I hear that we can hardly trust the government to address inequality given its own financial incompetence, and that if there is financial injustice about, surely the greatest injustice is the government’s systematic stealing from our children and grandchildren, whom we are saddling with an intolerable burden of debt. The theme of the travesty and looming catastrophe of US government debt has fueled the rise of the Tea Party, and played a role in the ridiculous fiscal standoffs in Congress over the past couple years. Of course, it is an important fiscal concern that both parties should be attentive to, but this is not usually how one hears it discussed—i.e., in the context of particular policies for fiscal responsibility. Rather, it is used as a universal putdown—a way of claiming, no matter what the particular point is under discussion, that the government cannot be trusted because its debt is both irresponsible and immoral, and that only a radical overhaul (one might almost say “overthrow” from some of the rhetoric) of our government can save us from imminent disaster.
As someone who used to be something of a national debt alarmist myself, I thought it might be helpful to put the issue in the proper context. The following is an expanded form of a little explanation I gave to a friend on the question after a political discussion last week.
1) Use real numbers
For one thing, inflation is generally ignored. All you have to do is yell out $16 trillion—an obviously immense sum—and point proven, right? “Over the last forty years, the debt has risen from $500 billion to $16 trillion—our debt is spiraling out of control.” Adjust for inflation, though, and it’s only risen from $2.4 trillion to $16.8 trillion. Obviously, however, that’s still a pretty substantial increase. That’s why it’s important to: Read More