https://www.businessinsider.com/trumps-economic-advisor-national-debt-deficit-spending-2019-7
ETA: https://www.pgpf.org/blog/2018/11/we-will-soon-be-spending-more-on-national-debt-interest-than-on-these-vital-programs
https://www.thebalance.com/interest-on-the-national-debt-4119024
So it's ok to run up debt during a good economy...President Donald Trump's top economic adviser Larry Kudlow downplayed the US record national debt of $22.5 trillion on Tuesday, claiming that it's not a cause of concern and the federal government is prepared to manage it.
"I don't see this as a huge problem right now at all," Kudlow said at CNBC's Capital Exchange event. "[It's] quite manageable."
But using a similar annual deficit to stimulate the economy during a recession is bad? mkayKudlow's remarks are a stark departure from his previously stated views in 2009, when he criticized the Obama administration's deficit spending aimed at stimulating the economy during the Great Recession. He called it "the most unbalanced fiscal story coming out of Washington, really, in our history."
:sigh:He also claimed that revenue analysis of Trump's tax cuts is "coming in very well" and expressed optimism their cost has already been covered.
"I would argue strongly that the corporate tax cut has already been paid for and that roughly two-thirds of the overall tax cut has been paid for," Kudlow said.
Kudlow is also sharply at odds with mainstream economic projections of the impact of the Trump administration's tax cuts passed in late 2017. Early last year, the Congressional Budget Office said that the tax law would slash government revenue by $1.9 trillion from 2018 to 2028.
Passed with mostly Republican support, the tax bill delivered permanent tax cuts to corporations while providing temporary ones to individual taxpayers. Republicans at the time argued that lowering taxes would propel economic growth that would bring in additional tax revenue for the federal government. But during Trump's presidency, their characteristic hawkishness on curbing deficit spending has evolved into a collective shrug over the practice.
While the economy is experiencing its longest sustained expansion in American history, the federal deficit is ballooning — when its supposed to shrink during strong economic times.
ETA: https://www.pgpf.org/blog/2018/11/we-will-soon-be-spending-more-on-national-debt-interest-than-on-these-vital-programs
People from both sides need to realize that both sides seem to like to spend money, but as our interest payments balloon, programs championed by both parties will have to be cut.The Congressional Budget Office (CBO) projects that interest payments will continue to grow rapidly, rising from $389 billion in fiscal year 2019 (the current fiscal year) to $914 billion in 2028. Overall, net interest costs will total nearly $7 trillion over the next decade.
https://www.thebalance.com/interest-on-the-national-debt-4119024
The interest on the debt immediately reduces the money available for other spending programs. As it increases over the next decade, advocates of those benefits will call for a reduction in spending in other areas.
In the long-term, a growing debt burden becomes a big problem for everyone. That's called the tipping point. The World Bank says a country reaches that point when the debt-to-GDP ratio approaches or exceeds 77%. That's because gross domestic product measures a country's entire economic output. When the debt is greater than the entire country's production, lenders worry whether the country will repay them. In fact, they did become concerned in 2011 and 2013. That's when tea party Republicans in Congress threatened to default on the U.S. debt.
There are some who would say it was a foolish attempt to limit government spending. Why? Because the Constitution gives Congress the ultimate authority to spend and by ignoring their budget process may have needlessly worried the nation's lenders.
Once lenders become concerned, they demand higher interest rates. Buyers of U.S. Treasurys appreciate the security of knowing they will be repaid. They'll want compensation for an increasing risk they won't be repaid. Diminished demand for U.S. Treasurys would further increase interest rates. That slows economic growth.
Lower demand for Treasurys also puts downward pressure on the dollar. That's because the dollar's value is tied to that of Treasury securities. As the dollar declines, foreign holders get paid back in currency that is worth less. That further decreases demand.
The rising interest on the debt worsens the U.S. debt crisis. Over the next 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to seniors. Congress would find ways to reduce benefits rather than raise taxes. For example, some are talking about privatizing Social Security.
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