Debt ain’t so bad
First, families have to pay back their debt. Governments don’t - all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation. Second - and this is the point almost nobody seems to get - an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.
I’ve heard the “family debt” analogy quite a bit in the last bit. The above quote from Paul Krugman nails it. Debt can be bad, but a modest rise in taxes should do the trick. Also, since interest rates have been pushed down so far recently, the government should be able to give itself some huge loans at almost 0% interest. Nice way to shore up an aging infrastructure and create some much needed jobs.
via Chron
