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And that's without considering that inflation is very low, so we can print our way out of some of it.
There are two possibilities: If in 25 years there wil be enough real resources (machines, infrastructure, knowledge..) for covering all the needs of the people, the accumulate debt is not going to be a problem. If in 25 years there will not be enough real resources, the government finances are going to be irrelevant.
So, what is the best way to make sure there are going to be enough resources? investing in infrastructure and education or "saving" money?
Unless, you know, there are enough goods to support a lifestyle similar to that of the current generation but our kids can't buy them because all their productivity is going to pay the interest on our generation's (foreign-owned) debt. Or there would have been enough goods but we took that money we borrowed and used it to shift production toward things we want now, compromising the capital investment and maintenance which were needed to stay productive so that everyone's needs could be covered in the future.
Profitable investment is good, and it isn't necessarily wrong to go in debt to fund a good investment, but there is such a thing as malinvestment—investing in the wrong things, resulting in a net loss—and the more debt you take on the more your productivity is continually drained away and unavailable for either investment or consumption. Profitable investments will take place without subsidies, and if it isn't clear which kinds of investment will end up being profitable then it's better to save the funds until the situation becomes clearer rather than waste scarce goods and labor on a bad investment.
Printing your way out of debt is not a solution, ask Argentina. Eventually your investors will lose faith in the value of the money they're getting back in return and the currency will collapse.
1. I never said fiscal stimulus was guaranteed to return more than the interest to service the debt needed to pay for it. I said if it does that. My point is deficit spending == bad is not always true.
2. You didn't provide any facts or resources to prove that there exists no possible fiscal stimulus that could generate a greater return than the interest on the debt needed to pay for it.
If you want resources, Google it. You'll find plenty of information backing up the claim that it is possible for deficit spending to pay for fiscal stimulus to be a net benefit.
>You don't address the fact that the debt has gone up 300% over the last 20 years while the GDP is up only an average of 2.5% a year.
Why are you quoting a 20 year value for the debt, but a yearly value for GDP?
>Printing your way out of debt is not a solution, ask Argentina.
Instead of looking at Argentina, why don't you look to the US? We've been effectively printing money since 2008 and inflation hasn't come close to going out of control.
The US isn't Argentina, and saying look to Argentina is no better than people saying look to Somalia for an example of why small hands off government doesn't work.
In the real world, though, Congress decides where to spend the money - not based on any kind of return on investment calculation, but based on political calculations. So in reality, a positive return, if it happens at all, will only happen by coincidence.
Boomers are the ones who tell you to be scared of the debt. Same boomers tell me that gold is the best investment
